On May 24, 2007, New York Governor Eliot Spitzer announced in full glory a $2 billion settlement to end an almost six-year dispute over the value of the insurance policies covering the now gone World Trade Center. The good governor had all the reasons to be euphoric not because he was not yet caught teleconferencing with $1,000 per-hour-prostitutes but because a rather tumultuous and ugly side-story in the post 911 New York was effectively consigned to its conclusion. The agreement brought to about $4.55 billion the total insurance proceeds developer and 99-year lease-holder Larry Silverstein and the Port Authority of New York and New Jersey will receive. The good governor in all his pre-Kristen-for-$4,000 magnificence even compared the insurance standoff to a Stanley Cup playoff hockey series in which the two sides play a ``very hard match'' and ``at the end of the series they always shake hands and move on.'' Or, did they?
To most, this simply means that the actual construction of the Freedom Tower in Ground Zero will now be finally commenced. To the real stakeholders, however, this untangled a Gordian knot which baffled so many from the very start. After almost seven years, those not privy to the mess are still repulsed by the fact that the stakeholders have the temerity to ask difficult questions and demand awkward if not revolting answers over the powdered remains of those who perished in the terrorist attacks. Everybody thought, at first, that the proposition is uncomplicated. Timing, as it had been later impressed, complicated it to a notch. Developer Larry Silverstein prevailed over the biggies as the 99-year lease-holder of the Twin Towers only in July 2001. Thus, the respective liabilities of each in a pool of 24 insurance companies tapped by the developer will have to be reckoned from binding preliminary commitments and not yet from formal and final insurance policies.
As it turned out, the extremely odd set of tragic circumstances compounded the problem even worse. The 16-minute interval between the impacts of the two hijacked jetliners could well mean that there are two separate insured occurrences that took place. To the insurance companies in the developer’s pool, this is 911 all over again. The 16-minute interval is, in fact, a $7 billion question—the additional amount of insurance proceeds the developer is entitled to receive under the two-occurrence standpoint. The standoff spawned a chain of events that saw the stakeholders battled—for some, in infamy—for all the loose billions at stake. Multitudes of cases have been filed in the District Court of the Southern District of New York, and later appeals crisscrossed in the US Court of Appeals for the Second Circuit. As of 2004, the federal juries ruled that Silverstein is entitled to a maximum of $4.68 billion. With the latest settlement, the insurers have already obligated themselves to pay the developer 97.2% of the aforesaid maximum amount.
To most, this simply means that the actual construction of the Freedom Tower in Ground Zero will now be finally commenced. To the real stakeholders, however, this untangled a Gordian knot which baffled so many from the very start. After almost seven years, those not privy to the mess are still repulsed by the fact that the stakeholders have the temerity to ask difficult questions and demand awkward if not revolting answers over the powdered remains of those who perished in the terrorist attacks. Everybody thought, at first, that the proposition is uncomplicated. Timing, as it had been later impressed, complicated it to a notch. Developer Larry Silverstein prevailed over the biggies as the 99-year lease-holder of the Twin Towers only in July 2001. Thus, the respective liabilities of each in a pool of 24 insurance companies tapped by the developer will have to be reckoned from binding preliminary commitments and not yet from formal and final insurance policies.
As it turned out, the extremely odd set of tragic circumstances compounded the problem even worse. The 16-minute interval between the impacts of the two hijacked jetliners could well mean that there are two separate insured occurrences that took place. To the insurance companies in the developer’s pool, this is 911 all over again. The 16-minute interval is, in fact, a $7 billion question—the additional amount of insurance proceeds the developer is entitled to receive under the two-occurrence standpoint. The standoff spawned a chain of events that saw the stakeholders battled—for some, in infamy—for all the loose billions at stake. Multitudes of cases have been filed in the District Court of the Southern District of New York, and later appeals crisscrossed in the US Court of Appeals for the Second Circuit. As of 2004, the federal juries ruled that Silverstein is entitled to a maximum of $4.68 billion. With the latest settlement, the insurers have already obligated themselves to pay the developer 97.2% of the aforesaid maximum amount.
The developer and the insurers seem content. But, as most would insist, the chapter grossly disrespected the dead of Ground Zero. To others, it exposed as feeble critical common law principles on contract formation as they apply to insurance contracts.
Submit mo na yan nyor sa Boston, patay ka na nyan kay Prof Robert Ludlum.
ReplyDeleteSubmitted it na your honor. Di ako humabol sa first option, I was 20 pages short and I could not crack my brain further plus Siargao was calling na! The alternate dl is on the 18th pa so there's enough time to traverse the tunnels (as if I can) and get lost in Cloud 9 (as if I can find my bearing). Summer na your honor: bbbs!
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