Content area
Full Text
At 2 o'clock on the afternoon of May 20, Douglas Durst was on the edge of his seat. He'd just received word from Cigna Investments, the firm to which his family-run real-estate organization pays its mortgage on the Conde Nast building, that his company was in default. Mr. Durst had made his payments, but his insurance carrier had dropped his terrorism coverage. It was a risk the investors were unwilling to take on without an insurance policy, regardless of price.
For his part, Mr. Durst and his lawyer, Warren Estis, had spent months lobbying in court to put off the default. The House of Representatives already had passed a bill providing for a federal backstop to cover uninsured losses to private property owners in case of a terrorist attack, and they were waiting for the Senate to hear the matter out and write the law.
But months after the House bill had passed, there was still no law. The courts appeared to be losing patience. A restraining order against Cigna, keeping it from declaring Mr. Durst in default, was set to expire at 3 p.m. on May 20, an hour after the letter from Cigna had arrived.
At the last minute, a judge extended the restraining order through the summer, and Mr. Durst's control of the building was saved, at least until September.
"It was a spectacular victory," Mr. Durst told The Observer.
At roughly the same time in Washington, D.C., a slugfest had developed between Senate Democrats, who favored a temporary measure committing the federal government to step in and stem potential losses to insurance companies from terrorist attacks, and Senate Republicans, who argued that such a measure constituted a government bailout of the insurance industry, and would expose the federal government to the same kind of lawsuits that the private insurance industry has been facing since Sept. 11. A deal to bring the bill to the Senate floor before Memorial Day, hatched early in the week between Democratic Senator Tom Daschle and Republican Senators Mitch McConnell and Phil Gramm, had floundered by the time the Senate recessed for the long Memorial Day weekend, sources told The Observer.
While work crews finished the cleanup of the World Trade Center site, Larry Silverstein, who...