Scott Rechler’s firm seeking $61M for denied business interruption claims during Covid
By: TRD Staff
RXR CEO Scott Rechler and 620 Sixth Avenue (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images, Beyond My Ken, CC BY-SA 4.0 – via Wikimedia Commons)
RXR Realty was prepared for the pandemic, but its insurers weren’t, and now it says it’s owed over $60 million.
In a lawsuit filed in state Supreme Court this week, Scott Rechler’s RXR alleges seven insurance providers denied its claims for business interruption coverage due to public health emergencies, despite the firm having purchased “all-risk” policies, Bisnow reported. RXR is seeking more than $61 million in damages for losses the commercial real estate giant incurred during the pandemic.
RXR claims its policies, which it took out in July 2019, included a “Special Perils Business Interruption” clause covering business disruptions as a result of “infectious or contagious disease manifested by any person while on the premises of the insured.”
The firm took out insurance policies on 44 buildings — 43 New York and one in Connecticut — and submitted its claims in July 2020, but says it was denied a month later and has yet to receive a payout.
Lawyers for RXR also said the policies provide protection against “actual loss sustained and the extra expense incurred by the insured.” The lawyers believe that should cover cleaning costs, temperature screening stations, sanitation stations and protective barriers.
Insurers named in the suit include Continental Casualty and Liberty Mutual Fire Insurance. Among the properties allegedly covered by the insurance policies are 620 Sixth Avenue, which RXR refinanced for over $400 million in October 2019, and 1330 Sixth Avenue, a 40-story office tower which RXR and Blackstone recently agreed to sell to Empire Capital Holdings for $325 million.