The $400 million settlement following the terror attacks of Sept. 11, 2001, according to a lawyer for one of the insurance firms.
Among the assets to be handed over by Maurice Sabbah and Kenneth Kornfeld are cash, antiques, vacation homes and commercial property.
Howard Hawkins, a lawyer for one of the three Japanese companies, told the News & Record for a story published Thursday that the insurers also are trying to reach a settlement with the American Hebrew Academy.
Sabbah financed the Greensboro boarding school with $100 million that the Japanese claim he defrauded from them.
“(Sabbah) didn’t have the lawful ability to gift those assets,” Hawkins said.
Sabbah and Kornfeld’s firm, Fortress Re of Burlington, was a reinsurer – an insurer for insurance companies, allowing them to pool financial resources they might need in the event of massive claims.
The Japanese firms paid premiums and management fees to Fortress Re, which was the pool manager for the four airplanes hijacked in the Sept. 11 attacks.
One of the insurers, Sompo Japan Insurance, sued Fortress Re in federal court, accusing Sabbah and Kornfeld of taking hundreds of millions of dollars that should have gone to cover claims from the losses caused by the planes. Accountants estimated the pool lost $1.4 billion that day.
Fortress Re denied the allegations in the lawsuit, saying pool members had a long, profitable relationship with the firm until the terrorist attacks – an extraordinary event that could not have been foreseen.
In December, an arbitration panel sided with Sompo, saying Fortress Re leaders engaged in fraud and “willful and deliberate misconduct” when doing business with Sompo. Fortress Re was ordered to pay Sompo $1.1 billion.
The $400 million, which includes a $265 million down payment the men made in January, represents what Sabbah and Kornfeld agreed to pay out for that billion-dollar award.
Sabbah and Kornfeld declined the News & Record’s interview request. Their lawyer, Glenn Drew, who is also Sabbah’s nephew, declined to discuss the settlement, saying it is confidential.
Hawkins, the lawyer for Sompo, said the settlement was “(greater) than what we realistically expected. (Sabbah and Kornfeld) decided to live out their lives in peace rather than fight the action until all their assets were taken.”
The two other companies receiving payments are Aioi Insurance Co. and Taisei Reinsurance Co.
One asset that has been deeded to the Japanese and is being sold is the Greensboro mansion where Kornfeld lived. He and his family have already moved out, and a real estate agent estimated the estate – built in 1936 by Cone Mills president Herman Cone – could bring between $6 million and $6.5 million.
Drew said the American Hebrew Academy – the country’s only non-Orthodox Jewish boarding school – is working on a settlement and planning for the upcoming academic year.