World Trade Center Properties, et al. v. American Airlines, et al.

Analysis Group was retained on behalf of real estate developer Silverstein Properties, the parent company of World Trade Center Properties, the plaintiff in a litigation matter. Silverstein Properties, which held 99-year leases to operate and rent out commercial office space on the World Trade Center site, sought to hold airlines and security companies financially responsible for failing to prevent the destruction of the World Trade Center buildings on September 11, 2001.

An Analysis Group team, led by Senior Advisor Bruce Strombom, and including Vice President Mike Nguyen, supported academic affiliate Kerry Vandell of the UCI Paul Merage School of Business. Professor Vandell opined on whether Silverstein’s insurance recoveries fully compensated it for its economic losses from the buildings’ destruction. He concluded that Silverstein’s losses exceeded the amount of its insurance recoveries, in part because of its obligation to continue to make lease payments after the buildings’ destruction, as well as the requirement that Silverstein bear reconstruction costs.

Following an initial ruling from the US District Court for the Southern District of New York in favor of the defendant, the US Court of Appeals for the Second Circuit agreed with Professor Vandell’s approach to estimating damages. The appeals court then directed Professor Vandell to assess Silverstein’s losses in several damages scenarios, as informed by its ruling. In each scenario, he concluded that Silverstein’s losses exceeded the amount of its insurance recoveries. The case eventually settled for $95.2 million.