Westfield America Trust is to appeal an adverse court decision made in the
US last week on the insurance claim over the World Trade Centre.
Summary judgements delivered by the Federal District Court in New York ruled
that three of the insurers of the WTC had provided coverage under the
``Wilprop" form and were, therefore, limited to only one occurrence.
Affected are Westfield America, in conjunction with Silverstein Properties
Inc and the Port Authority.
The decision relates to a total of only $US112 million ($207 million) of the
$US6.7 billion claim but indicates payments to World Trade Centre claimants will
be lower than hoped.
The owners have claimed that the terrorist attacks were two occurrences: the
two planes hitting the towers being one event and the towers collapsing another.
Under this interpretation, more money would be paid out.
The shopping centre manager and developer, run in the US by Westfield joint
managing director Peter Lowy, said late yesterday that the three had accepted a
legal suggestion that they pursue expedited appeals.
``As a consequence, the trial of the case, previously scheduled for
mid-November, will be deferred pending a decision by the United States Court of
Appeals," the trust said.
``Judge Martin has indicated that he is willing to endorse an appeal on the
legal question as to whether the events of September 11 constitute one or two
occurrences under the Travelers Insurance policy form.
``Judge Martin also indicated that once the legal issues governing coverage
were determined on appeal, he would be willing to commence the trial promptly.
``The trust believes that an expedited appeal of these issues will advance
the final resolution of the insurance claim. The trust reiterates that it
remains confident that the property insurance policies are adequate to protect
its investment and to reimburse it for expected business interruption losses due
to the terrorist attacks."
Analysts have said that the main issue for Westfield America, which owns the
lease on the 40,000 sq m shopping plaza underneath the towers, remains getting
plans approved to rebuild the complex.
Westfield took out terrorist insurance when it bought the lease in May 2001
and is expecting to receive up to $3 billion from that policy. Already $US150
million in insurance proceeds has been paid, of which Westfield America Trust's
share is $US17.3 million.
Westfield America originally had 22 claims but settled three shortly after
The other 17 claims cover a myriad of issues and are expected to take years
to get through the courts.
Westfield America is moving ahead with the integration of its Rodamco assets
that it bought in a hard-fought battle earlier this year.
The trust has also reopened its Westfield Shoppingtown West County, in Des
Peres, Missouri, recently after a $US237 million redevelopment.
UBS Warburg has rated the Westfield America a ``buy" in its latest research
document, saying the trust had growth potential through acquisition given the
fragmented nature of the US retail market.
``An estimated 50 per cent of US regional centres are owned by the listed
real estate investment trust, providing opportunities to acquire from private
investors and companies," Warburg said.