| September 11:Â Two Years Later
GMAC Files Lawsuit Against WTC Leaseholder Unpaid $563 million bonds at issue September 11, 2003 By PATRICK CROWLEY
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| A massive lawsuit has been filed against the owners of the World Trade Center by one the nation’s largest mortgage lenders.General Motors Acceptance Corp., or GMAC, says in the suit that World Trade Center leaseholder Larry Silverstein has not set aside enough of $1.9 billion in insurance proceeds to repay $563 million plus interest he owes his bondholders. Also named in the suit was World Trade Center owner, the Port Authority of New York and New Jersey.
In court documents filed in the Supreme Court of the State of New York in Manhattan GMAC, a unit of Detroit-based automaker General Motors, said it loaned Silverstein $563 million to lease four of the seven World Center Buildings – including the Twin Towers – less that two months before terrorists slammed hijacked jet airlines into the two 110-story buildings. Silverstein, a New York-real estate investor and executive, has not set aside any of the insurance money for investors even though his contract with the lender requires him to do so. He leases the buildings from the Port Authority and is attempting to redevelop the site. “Defendants refuse to allocate insurance proceeds to cover the principal and interest payments that will come due during the rebuilding period,” GMAC said in the lawsuit. The company asked for an injunction that would force Silverstein and the Port Authority to meet their contractual obligations. A GMAC spokeswoman refused to comment because the matter is the subject of a lawsuit. Port Authority officials could not be reached to comment. Silverstein issued a statement through his spokesman, Howard Rubenstein. “It is unfortunate and unnecessary that this dispute ended up in court,” Rubenstein said in the written statement. “We have been working with the Port Authority and GMAC for months to try and avoid this litigation. It is incumbent upon everyone involved to sit down and try to solve GMACs issues in a way that will enable us to proceed without delay in rebuilding the World Trade Center.” Neither Silverstein nor Rubenstein were available for further comment. To date Silverstein and the Port Authority have collected $1.9 billion in insurance money. According to court documents GMAC no longer holds the loan, but does administer it. The debt was sold to unidentified institutional investors who hold the bonds. According to published reports Silverstein is also fighting insurance companies over payments on the World Trade Center. He maintains he is entitled to double his $3.5 billion insurance policy because the two World Trade Center towers were attacked and fell separately. The insures have countered Silverstein is only entitled to one claim because the attack was planned and coordinated as a single event. It is feared that a protracted legal fight could delay construction of a new tower planned on the lower Manhattan site. New York Gov. George Pataki has said he wants to lay the cornerstone by next summer. |
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Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: pcrowley@enquirer.com |
