By Erik Larson Bloomberg
Cantor Fitzgerald LP won court approval of a $135 million settlement to resolve claims American Airlines (AAL) was negligent in the September 11, 2001, terrorist attack that killed 658 of the firm’s workers.
U.S. District Judge Alvin K. Hellerstein in Manhattan approved the settlement at a hearing today. The airline was accused in a lawsuit of failing to stop the hijacking of the plane that crashed into the north tower of the World Trade Center on 9/11.
The settlement is “fair and reasonable,” Hellerstein said today. A case like Cantor’s has “never been encountered before in American court,” the judge said.
The Dec. 13 settlement of the suit, filed almost 10 years ago, came 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 jetliners into the Twin Towers, causing both to burn and collapse. Two other planes were hijacked. One hit the Pentagon near Washington, and another 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 Flight 11 from Logan International Airport in Boston and crashed into the north tower. Cantor’s offices were near the top of the 110-story building.
In a statement about the deal on Dec. 13, Kent Powell, a spokesman for Fort Worth, Texas-based American, said the lawsuit alleged it “should have done what the government could not do: prevent the terrorist attacks.” The carrier’s insurers agreed to settle with Cantor, he said.
In Cantor’s suit, 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.
On September 11 each year, Cantor and its affiliate, BGC Partners Inc. (BGCP), 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.
Cantor, founded in 1945, has new offices off Park Avenue in Midtown Manhattan. The company and BGC have a total of about 3,200 employees in New York and 8,000 worldwide.
The case is Cantor Fitzgerald & Co. v. American Airlines Inc., 04-cv-07318, U.S. District Court, Southern District of New York (Manhattan).