Allianz in Mediation with WTC Developer Silverstein
Tue Mar 13, 2007

NEW YORK (Reuters) - Allianz said mediators would seek to determine how much it owes the developer of the World Trade Center, while he led a demonstration against Europe's biggest insurer for withholding funds.

"We're going to make you pay!" Larry Silverstein shouted in front of a crowd of about 200 cheering construction workers at a noon rally in midtown Manhattan on Monday.

Silverstein, who leased the downtown site destroyed on Sept. 11, 2001, claims Allianz still owes him $553 million and that a second insurer, Britain's Royal & Sun Alliance, owes him $250 million. He said their reluctance had slowed rebuilding at the site.

"You can count on some insurance companies to look for every way they can think of to avoid paying up," said Silverstein, making common cause with Gulf Coast homeowners who are suing for claims from Hurricane Katrina in 2005.

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Allianz spokeswoman Sabia Schwarzer said a mediation process between Silverstein and the German insurer began on Monday. She said she had no further details.

Royal & Sun spokesman Kader Bryan said his company would "continue to pay our obligations as they come due" and that Royal & Sun currently did not owe Silverstein and the Port Authority any money.

A spokesman for Silverstein declined to comment on the mediation talks.

Brooklyn-Queens Democratic Congressman Anthony Weiner vowed to punish the insurers with fines or operating restrictions if they did not pay up.

"It is time for them to be held accountable," said Anthony Shorris, executive director of the Port Authority of New York and New Jersey, the owner of the World Trade Center site.

The Allianz spokeswoman said the insurer had already paid almost $2 billion in claims from the World Trade Center disaster, settling with all its policyholders except for Silverstein and the Port Authority.

Schwarzer said Allianz has paid Silverstein and the Port Authority almost $550 million and that the developer had more than enough money in the bank to begin construction at the lower Manhattan site.

Royal & Sun recently spun off its U.S. operations to Arrowpoint Capital, a unit run by its U.S. management. Silverstein and the Port Authority have sued, claiming Arrowpoint will not have enough capital to meet their claims.

The Delaware insurance commissioner approved the sale on Feb. 20 over their objections, however, saying Arrowpoint would have enough money to meet its obligations.

© Reuters 2007. All Rights Reserved.

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