"I find that the insurance contract does provide for contractual subrogation and gives priority of recovery to Allianz," Judge Harold Baer, for the Southern District of New York, said in a decision issued on Tuesday.
The judge, in his opinion, defined subrogation, as "the right of an insurer, having paid losses of its insured, to be placed in the shoes of its insured so that it may recover from a third party legally responsible for the loss."
The purpose of subrogation is to prevent whoever buys insurance from "recovering twice for one harm," Judge Baer wrote.
A spokesman for Mr. Silverstein said: "We don't think that Judge Baer's decision has any effect on other insurers, that is, insurers other than Allianz. Also, we disagree with the decision and will appeal it."
The court decision means that Allianz could collect on any sums paid by the third parties before Mr. Silverstein. Most other insurers have waived this right.