Larry Silverbird With Commentary by Jeff

----------------- Original Message -----------------
From: <>Jeff
Date: Aug 24, 2007 10:52 PM


Larry A. Silverstein is a real estate developer in New York City and was appointed a director of Westfield America in May 1997. Since 1979, Mr. Silverstein has been President of Silverstein Properties, Inc., a Manhattan-based real estate investment and development firm which owns interests in and operates over 10 million square feet of office space.

Larry Silverstein purchased a $3.2 billion, 99-year lease of the World Trade Center in July 2001, along with the above mentioned partner Westfield America for the shopping parts. Silverstein took control of the 10-million-square-foot trophy office complex just seven weeks before it was destroyed by terrorist attacks.

The veteran developer also owned the collapsed 7 World Trade Center, a 2-million-square-foot, 47-story office building adjacent to the complex erected by the bi-state agency Port Authority of New York and New Jersey. In the meanwhile the new 7 World Trade Center building is under construction.


Silverstein: WTC Leaseholder May Collect Up To $4.6B
Greg Levine, 12.06.04, 7:52 PM ET

A page, if not a chapter, has come to closure in the long dark saga of Sept. 11, 2001. A federal jury on Monday ruled that the assault on the Twin Towers of the World Trade Center was in fact two occurrences for insurance purposes. The finding in U.S. District Court in Manhattan means leaseholder Larry Silverstein may collect up to $4.6 billion, according to reports. "I strongly felt, and the jury agreed, that the destruction of the twin towers by two separate airplanes at two separate times was two separate occurrences," the Gotham real estate titan said. He still must appear before a three-person appraisal panel to collect the money, and the insurers involved are also expected to appeal the decision. In a statement, Silverstein said he was thrilled with the verdict, and described it as a victory for all New Yorkers, as it secures greater funds to rebuild the ravaged WTC zone. "These insurers have an obligation to pay their fair share, to help make Lower Manhattan whole again," he declared.


Larry "Lucky Larry" Silverstein
BY: lifeforce@rockymountains.net
Date Published: 2006-09-06

You've got to be lucky to make $4 Billion killing on a 6-month investment of $124 Million

Larry Silverstein is the New York property tycoon who purchased the entire WTC complex just 6 months prior to the 9/11 attacks. That was the first time in its 33-year history the complex had EVER changed ownership.

Mr. Silverstein's first order of business as the new owner was to change the company responsible for the security of the complex. The new security company he hired was Securacom (now Stratasec). George W. Bush's brother, Marvin Bush, was on its board of directors, and Marvin's cousin, Wirt Walker III, was its CEO. According to public records, not only did Securacom provide electronic security for the World Trade Center, it also covered Dulles International Airport and United Airlines, two key players in the 9/11 attacks.

The company was backed by an investment firm, the Kuwait-American Corp., also linked for many years to the Bush family. KuwAm has been linked to the Bush family financially since the Gulf War. One of its principals and a member of the Kuwaiti royal family, Mishal Yousef Saud al Sabah, served on the board of Stratesec.

Now, consider: The members of a small cabal owned the WTC complex, controlled its electronic security, and also controlled the security not only for one of the airlines whose aircraft were hijacked on 9/11, but the airport from which they originated.

Another little “coincidence” -- Mr. Silversten, who made a down-payment of $124 million on this $3.2 billion complex, promptly insured it for $7 Billion. Not only that, he covered the complex against "terrorist attacks".

Following the attacks, Silverstein filed TWO insurance claims for the maximum amount of the policy ($7B), based on the two -- in Silverstein's view -- separate attacks. The insurance company, Swiss Re, paid Mr. Silverstein $4.6 Billion - a princely return on a relatively paltry investment of $124 million.

There’s more. You see, the World Trade Towers were not the real estate plum we are led to believe. From an economic standpoint, the trade center -- subsidized since its inception by the NY Port Authority -- has never functioned, nor was it intended to function, unprotected in the rough-and-tumble real estate marketplace. How could Silverstein Group have been ignorant of this?

The towers required some $200 million in renovations and improvements, most of which related to removal and replacement of building materials declared to be health hazards in the years since the towers were built. It was well-known by the city of New York that the WTC was an asbestos bombshell. For years, the Port Authority treated the building like an aging dinosaur, attempting on several occasions to get permits to demolish the building for liability reasons, but being turned down due the known asbestos problem. Further, it was well-known the only reason the building was still standing until 9/11 was because it was too costly to disassemble the twin towers floor by floor since the Port Authority was prohibited legally from demolishing the buildings.

The projected cost to disassemble the towers: $15 Billion. Just the scaffolding for the operation was estimated at $2.4 Billion!

In other words, the Twin Towers were condemned structures. How convenient that an unexpected “terrorist” attack demolished the buildings completely.

WTC Building 7 was a part of the WTC complex, and covered under the same insurance policy. This 47-storey steel-framed structure, which was NOT struck by an aircraft, mysteriously collapsed 8 hours later that same day into its own footprint at freefall speed - exactly in the manner of the Twin Towers.

How could this have happened? Mr. Silverstein gave the world the answer when he slipped up during a PBS television interview a year later, on 9/11/2002:

"I remember getting a call from the...er...fire department commander, telling me that they were not sure they were gonna be able to contain the fire, and I said, 'We've had such terrible loss of life, maybe the smartest thing to do is pull it.' And they made that decision to pull and we watched the building collapse."

As anyone who knows anything about construction can tell you, “Pull” is common industry jargon for a controlled demolition.

One thing is for sure, the decision to 'pull' WTC 7 would have delighted many people. Especially because it has been reported that thousands of sensitive files relating to some of the biggest financial scams in history — including Enron and WorldCom -- were stored in the offices of some of the building's tenants:


US Secret Service
NSA
CIA
IRS
BATF
SEC
NAIC Securities
Salomon Smith Barney
American Express Bank International
Standard Chartered Bank
Provident Financial Management
ITT Hartford Insurance Group
Federal Home Loan Bank


The Securities and Exchange Commission has not quantified the number of active cases in which substantial files were destroyed by the collapse of WTC 7. Reuters news service and the Los Angeles Times published reports estimating them at 3,000 to 4,000. They include the agency's major inquiry into the manner in which investment banks divvied up hot shares of initial public offerings during the high-tech boom. ..."Ongoing investigations at the New York SEC will be dramatically affected because so much of their work is paper-intensive," said Max Berger of New York's Bernstein Litowitz Berger & Grossmann. "This is a disaster for these cases."

Citigroup says some information that the committee is seeking [about WorldCom] was destroyed in the Sept. 11 terror attack on the World Trade Center. Salomon had offices in 7 World Trade Center. The bank says that back-up tapes of corporate emails from September 1998 through December 2000 were stored at the building and destroyed in the attack.

Inside WTC 7 was the US Secret Service's largest field office with more than 200 employees. "All the evidence that we stored at 7 World Trade, in all our cases, went down with the building," according to US Secret Service Special Agent David Curran.

What a neat, complete, and fortuitous turn of events was 9/11.

Incidentally, its worth noting that one of Lucky Larry's closest friends - a person with whom its said he speaks almost daily by phone - is none other than former Israeli Prime Minister Benjamin Netanyahu.

A page, if not a chapter, has come to closure in the long dark saga of Sept. 11, 2001. A federal jury on Monday ruled that the assault on the Twin Towers of the World Trade Center was in fact two occurrences for insurance purposes. The finding in U.S. District Court in Manhattan means leaseholder Larry Silverstein may collect up to $4.6 billion, according to reports. "I strongly felt, and the jury agreed, that the destruction of the twin towers by two separate airplanes at two separate times was two separate occurrences," the Gotham real estate titan said. He still must appear before a three-person appraisal panel to collect the money, and the insurers involved are also expected to appeal the decision. In a statement, Silverstein said he was thrilled with the verdict, and described it as a victory for all New Yorkers, as it secures greater funds to rebuild the ravaged WTC zone. "These insurers have an obligation to pay their fair share, to help make Lower Manhattan whole again," he declared.

Trade Center Financing On Shaky Ground

NEW YORK - Since the Sept. 11, 2001, attacks destroyed the World Trade Center, there has been tremendous worldwide concern about what the rebuilt complex might look like. That question has largely been answered, at least in broad outline. Meanwhile, though, there is a serious question about where the money will come from to pay for it.

Larry A. Silverstein, whose Silverstein Properties obtained a 99-year lease for the Twin Towers and other portions of the complex just weeks before the catastrophe, says he has both the right and the obligation to rebuild and he intends to do so. The money Silverstein needs, he says, will come from the proceeds of his insurance policy on the towers.

Silverstein says those proceeds should come to $7 billion. No one has made a serious estimate of the cost of rebuilding. But Gerald McKelvey, a spokesman for the developer, says with a chuckle, "It's probably about $7 billion." What if Silverstein loses in court and doesn't get the full amount? "He's never gone beyond that," McKelvey says. A spokesman for the Port Authority of New York and New Jersey says Silverstein has assured them he has the resources to complete construction, and they have no reason to question it.

It seems more than likely, though, that Silverstein will wind up with something closer to $3.5 billion. If that's all he gets out of the court fight with his insurers, it means that the rebuilding of the Trade Center site will have to be rethought.

The original complex was completed in 1973 by the Port Authority, which leased it to Silverstein in the summer of 2001 as part of its effort to privatize noncore functions. Silverstein had insured the complex through 22 companies, including SR International Business Insurance, a unit of Swiss Re (otc: SWCEY - news - people ), the giant Zurich-based insurer.

After the attacks, in October 2001, Swiss Re filed suit for a declaration of its obligations. It was moved to act, company officials say, because Silverstein's insurance policy caps payment at $3.5 billion, yet Silverstein was propounding a theory that entitled him to $7 billion, based on the idea that two airplanes attacking two towers amounts to two separate "occurrences," entitling him to two separate payouts.

The insurers see the case as both simpler and less semantic. They say Silverstein made a deliberate choice about how much insurance to buy and that the limit of his policy is $3.5 billion regardless of how many occurrences there were. They say it's as if a man insured a car for $20,000: It doesn't matter if he crashed it once, twice or ten times--$20,000 is all he gets.

The great irony is that Silverstein's lawyers, led by Herbert Wachtell, a founding partner of Wachtell Lipton Rosen & Katz, are arguing that the insurance binder (an interim policy before the final detailed policy is issued) that Silverstein's own people prepared should be ignored. This form, called Wilprop for Silverstein's insurance broker Willis Group Holdings (nyse: WSH - news - people ), defined the term "occurrence" to include a "series of similar causes." Everyone basically admits that, under this definition, there would be no issue and the maximum insurance payout would be $3.5 billion. But as negotiations to insure the building proceeded, a second binder form was offered by Travelers Indemnity, a unit of Travelers Property Casualty, which didn't define the term "occurrence" at all. This, Silverstein's lawyers now argue, is the form that should rule.

Normally, the insured wants a restrictive definition of "occurrence" because the term usually applies to determining deductibles, says Jacques Dubois, chairman of Swiss Re America Holding. In other words, the greater the number of occurrences, the more deductibles there are. If, for instance, the building were damaged by a flood caused by two separate storms, it would be in Silverstein's interest that the flood be a single occurrence, so he would only be required to pay one deductible. In this case, with the Trade Center complex a total loss, deductibles are not an issue, and Silverstein has argued that the maximum payout should be made "per occurrence."

In its court papers, Swiss Re shows how Silverstein first tried to buy just $1.5 billion in property damage and business-interruption coverage. When his lenders objected, he discussed buying a $5 billion policy. Ultimately, he settled on the $3.5 billion figure, which was less than the likely cost of rebuilding. His lenders, led by GMAC, a unit of General Motors (nyse: GM - news - people ), which financed nearly the entire cost of the lease, agreed.

Some of the insurance companies have accused Silverstein of
manipulating the press coverage of the litigation. These insurers said the whole idea that there were two occurrences mandating two payouts was concocted by Wachtell. If this is the case, Silverstein certainly would not be the first businessman who has used the best legal minds to press his advantage. It's not inconceivable that the U.S. Second Circuit Court of Appeals will agree with him, though at the District Court level he has lost so far.

Despite the pitfalls, Silverstein has gotten everyone else in the process--apart from the insurers--to back his vision, and he also has been able to have his architect take the lead in the redesign. As long as he continues to make payments (perhaps financed by the insurers with whom he has settled), the Port Authority continues to insist that Silverstein will pay to rebuild the commercial parts of the site. (The federal government will finance the transportation hub; others may pay for the memorial or for the cost of expanding the site's original 16 acres.)

If the history of the World Trade Center is any guide, estimating the cost of a project of that scale is fraught with peril. In 1964, when the Port Authority announced plans to build the original complex, the construction budget was $525 million. By 1973, when construction was complete, the cost had tripled to an estimated $1.5 billion.

Since the Port Authority is a public, tax-exempt entity, the cost overruns were unfortunate but did not deter the project. Now the Port Authority seems to be relying on the capacity of a single developer with just one major building project under his belt. While the political will to build is likely greater than ever, the money seems dependent on a court victory that is at best uncertain.