By Joseph Ax
NEW YORK (Reuters) - American Airlines Group Inc and its insurers have agreed to pay $135 million to Cantor Fitzgerald to settle the financial services company's lawsuit over business and property losses suffered in the September 11 attacks on the World Trade Center, in which 658 of its employees were killed.
The settlement, which requires approval from U.S. District Judge Alvin Hellerstein, averts a trial that had been scheduled to begin next month and ends one of the final major pieces of litigation stemming from the 2001 attacks.
John Stoviak, a lawyer for Cantor, disclosed the terms of the settlement at a hearing on Tuesday in U.S. District Court in New York before Hellerstein, who will consider approval at a hearing on January 13.
Hellerstein, who has overseen much of the litigation related to the September 11 attacks, took Tuesday's brief hearing as an opportunity to reflect upon more than a decade of lawsuits. Questions like how the United States should prevent attacks or whether there was negligence involved, he said, may never be fully answered.
"Perhaps that is proper," he said. "There's been no final accounting. ... Hopefully, what is achieved is a measure of justice, a measure of reparation and closure to what for many people was a terrible tragedy."
Cantor lost nearly two-thirds of its roughly 1,000 local employees after American Airlines Flight 11 struck the World Trade Center's north tower, where the financial services company had occupied the top floors. The attacks caused nearly 3,000 deaths in all.
"For the insurance companies, this was just another case, just another settlement, but not for us," Cantor Chief Executive Officer Howard Lutnick said in a statement. "For us, there is no way to describe this compromise with inapt words like ordinary, fair or reasonable. All we can say is that the legal formality of this matter is over."
American said in a statement that the airline, its crew members and its passengers were all victims of the attacks.
"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," the statement added. "Our insurers have agreed to settle the claims by Cantor Fitzgerald. Although this settlement ends these particular legal disputes, American will forever honor the memory of the true victims and selfless heroes of 9/11."
In the lawsuit, originally filed in 2004, the firm accused American of negligence for failing to prevent hijackers from boarding the flight at Logan International Airport in Boston.
The firm had at one point sought more than $1 billion in damages, but that sum was later reduced to between $464 million and $484 million.
In defending the case, American had contended that it had no way to foresee the attack.
The final amount of the Cantor settlement will be slightly reduced, by less than 2 percent, because two insurers are insolvent, Stoviak told Hellerstein.
The former AMR Corp, the parent of American Airlines, merged this week with US Airways Group Inc.
Other September 11-related litigation that has gone through Hellerstein's court includes cases involving the World Trade Center's developer, victims, property owners and Ground Zero workers.
The cases are Cantor Fitzgerald & Co et al v. American Airlines Inc et al, U.S. District Court, Southern District of New York, No. 04-07318; and In re: September 11 Property Damages and Business Loss Litigation in the same court, No. 21-mc-00101.
(Reporting by Joseph Ax; Editing by David Gregorio)