Judge challenges Silverstein's $2.8B WTC airlines suit

Developer Larry Silverstein may not be able to collect $2.8 billion in damages he was seeking from airlines and security companies he claims are partially responsible for the Sept. 11, 2001, terrorist destruction of the World Trade Center, according to the most recent ruling in the eight-year saga.

A judge for the U.S. Southern District ruled last week that $4.1 billion in insurance claims Mr. Silverstein's firm, World Trade Center Properties, has collected from various insurers may offset any damages he was seeking from the airlines.

The court earlier this year limited Mr. Silverstein's claim against the airlines and security companies to a maximum of $2.8 billion—a much smaller amount than the $12.8 billion he sought in the original suit, filed in 2004.

Mr. Silverstein sued the airlines and security companies for failing to prevent the attacks and was seeking damages for his losses after the Twin Towers fell.

The aviation defendants argued that the insurance recovery World Trade Center Properties had already received—the $4.1 billion—should be used to offset Mr. Silverstein’s claims against the airlines and security firms.

Mr. Silverstein argued that the two claims are not related and should go to a jury trial. A WTCP spokesman noted this week that the firm is still allowed to sue for further “consequential” damages.

Each side declared victory in the latest ruling.

WTCP can pursue its quest for damages. Indeed, a representative for Mr. Silverstein said this week WTPC plans to continue with the lawsuit.

As for the airlines, the judge noted in his ruling that he considered the $4.1 billion that WTCP collected covered both the costs of replacing the buildings and the business lost in the interim, “unless WTCP pleads and proves specific facts” that the money applied to other things. The court also ruled that Mr. Silverstein was not entitled to recover the costs of replacing tenants, nor could he recover lawyers' fees from the airlines.

The airlines have spent years fighting to lower the potential monetary damages from Mr. Silverstein’s suit. Last year, their legal team even suggested the suit was seeking more money than the total amount of insurance the airlines and security firms had available.

Correction: Larry Silverstein’s World Trade Center Properties may still proceed with its lawsuit seeking $2.8 billion in damages against the airlines and security firms involved in 9/11 attacks. That fact was misstated in an earlier version of this article published Oct. 7, 2009.