Lloyd's underwriters and AXA Global Risks are among the ten insurers looking to sue the Port...

Lloyd's underwriters and AXA Global Risks are among 10 insurers looking to sue the Port Authority of New York and New Jersey over a $2.1bn claim relating to the reconstruction of property following attacks on the World Trade Centre (WTC).

According to the group, the port authority effectively sold much of the WTC complex in July 2001 to a group of investors led by Larry Silverstein under 99-year lease agreements.

The Silverstein interests are required to rebuild the destroyed property regardless of insurance, and they also insured the property for $3.55bn – more than twice the amount of insurance previously maintained on the same property.

The authority recently stated that there is at least a $2.1bn “shortfall” in the amount necessary to rebuild 10m square feet of commercial space at the WTC.

The authority maintained its own insurance on other property at the site and throughout the New York metropolitan area and has already received payments of $950m from its insurers for damage on 9/11 to WTC property not controlled by the Silverstein interests.

Kenneth Erickson of Ropes and Gray, representing the insurers, said: “The World Trade Centre property sold to the Silverstein interests under these 99-year leases is not covered as claimed under the port authority's insurance.

“The port authority is not entitled to recover for the same property under both the Silverstein and the port authority insurance or to obtain double its own insurance to make up for a ‘shortfall' in its litigation against the Silverstein insurers.

Our clients collectively underwrote the largest portion of the port authority insurance and, when presented with this new position, they told the port authority that it was wrong and now file this action to seek confirming judgment from the same federal court that heard the prior case."

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