Cantor Fitzgerald LP settled a lawsuit accusing American Airlines (AAL:US) of failing to stop the hijacking of a plane that crashed into the World Trade Center on Sept. 11, 2001, killing 658 of the firm’s employees.
U.S. District Judge Alvin K. Hellerstein in Manhattan was told of the agreement at a hearing today, according to court records. Hellerstein scheduled a Jan. 13 hearing to consider approving the accord.
The settlement of the lawsuit, filed almost 10 years ago, comes four days after American’s parent, AMR Corp., completed a merger with US Airways Group Inc. to form American Airlines Group Inc.
Al-Qaeda terrorists flew the American Airlines jet into one of the twin towers and a United Airlines (UAL:US) jet into the other, causing both buildings to burn and collapse. Two other planes were hijacked, one that hit the Pentagon near Washington and another that crashed in a field in Pennsylvania after passengers fought the terrorists. About 3,000 people died.
Cantor alleged American should have stopped five Islamic extremists who took over its Flight 11 from Logan International Airport in Boston and crashed it into the North Tower. Cantor’s offices were near the top of the 110-floor building.
“American has vigorously defended itself in litigation brought against it by property owners and their insurers who allege that American should have done what the government could not do: prevent the terrorist attacks,” Kent Powell, a spokesman for the Fort Worth, Texas-based airline (AAL:US), said in an e-mailed statement. “Our insurers have agreed to settle the claims by Cantor Fitzgerald.”
Robert Hubbell, a spokesman for Cantor, declined to comment on the settlement because the matter is still active in court.
In its lawsuit filed in September 2004, the New York-based global financial services firm sought $945 million. A 2011 ruling in the airline’s favor limited Cantor to seeking damages for business interruption and barred it from seeking damages for the deaths of its employees.
Cantor Chief Executive Officer Howard Lutnick’s brother, who was a senior executive at the firm, died in the attack. The firm had 960 employees in New York at the time.
In a related negligence lawsuit, Hellerstein ruled in July that real estate developer Larry Silverstein, who leased the skyscrapers about two months before they were destroyed, can’t seek $3.5 billion from AMR or United Continental Holdings Inc. Silverstein had already collected $4.1 billion from insurers and can’t collect twice under New York law, the judge ruled.
On Sept. 11 each year, Cantor and its affiliate, BGC Partners Inc. (BGCP:US), which was spun off in 2004, give all their revenue from the day to more than 40 nonprofit groups. The companies, both led by Lutnick, raised about $12 million this year, and over the past 11 anniversaries combined it has donated about $89 million, Hubbell said.
Cantor, founded in 1945, has new offices off of Park Avenue in Midtown Manhattan. The company and BGC have a total of about 3,200 employees in New York and 8,000 worldwide.
In the days after the attack, Cantor pledged to give 25 percent of the firm’s profit over the next five years to the families of the employees who died, as well as 10 years of health care, Hubbell said. In the five-year period, the amount donated totaled more than $180 million, he has said.
The case is Cantor Fitzgerald & Co. v. American Airlines Inc., 04-cv-07318, U.S. District Court, Southern District of New York (Manhattan).
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