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Durst Organization cannot be charged additional penalties by Cigna or LaSalle in terrorism insurance case

Real Estate Weekly, June 25, 2003

In a victory for The Durst Organization, a ruling in New York State Supreme Court broadens the scope of the preliminary injunction against Cigna and LaSalle National Bank Association from holding the owners of Four Times Square in default or extracting any fees or penalties, attorneys for Durst said today.

The court's action is the latest in litigation that centers on whether The Durst Organization should be required to purchase terrorism insurance to supplement the insurance already in place on its 1.6-million-SF tower, also known as the Conde Nast Building. Cigna is the special servicer, and LaSalle the major lender, for the mortgage on the building.

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Justice Rosalyn Richter, in State Supreme Court in Manhattan, rejected the lenders' claims that circumstances have changed since the Appellate Division granted a temporary injunction. "Even if this court were to accept defendants' argument that the case now presents some new issues, defendants still have failed to show that they cannot be adequately compensated by monetary damages," Justice Richter said.

Warren A. Estis, a partner in Rosenberg & Estis, representing The Durst Organization; says the ruling is consistent with the Appellate Division's earlier determination but also "protects the Dursts from attempts to default them or extract any fees or penalties based on claims of new circumstances."

The Durst Organization maintains that its existing mortgage insurance on Four Times Square (located on the east side of Seventh Avenue, between 42nd and 43rd Streets) fulfills all of its legal obligations to the mortgage holders. A final decision in the case is expected in 12 to 18 months.

Expressing his frustration over the ongoing litigation, co-president Douglas Durst says his firm "will never do business with Cigna again."

Business Services Industry

Durst Organization cannot be charged additional penalties by Cigna or LaSalle in terrorism insurance case

Real Estate Weekly, June 25, 2003

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