The 2nd Circuit Court of Appeals has issued its decision on the appeal of developer Larry Silverstein’s company in the long-running World Trade Center litigation, reversing the District Court’s judgment that Silverstein was not entitled to further compensation.
The 2nd Circuit held that Silverstein is not entitled to recover losses against the airlines to the extent the same loss was compensated by the commercial property insurers. The Court of Appeals also held that under New York’s “lesser of two” rule, Silverstein was entitled to recover only the lesser of the diminution in value of the leasehold interests, or the cost of restoration.
But, the Court of Appeals held that the judge was in error in determining that Silverstein’s loss on the leasehold interest was only $2.8 billion. The Court of Appeals held that a different loss methodology should have been used in determining Silverstein’s loss for the diminution in value of the leasehold interest. The district court then determined the value of the leasehold interest before the loss was $2.8 billion and a zero value afterwards. The Court of Appeals held this methodology was not correct, because it agreed with Silverstein that the value of the leasehold interest after the loss could be negative.
On remand, Silverstein will be entitled to a new loss calculation, and will be entitled to pre-judgment interest at New York’s statutory rate of 9% on any amount of loss that is determined to be above $4.1 billion. Whether Silverstein will be able to prove a loss above $4.1 billion is to be determined. Click here to read the full article.
For more information on insurance claims, please contact Chris Frederick or Kyle Aldridge by calling 770.396.2200.