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Con Edison Steam Pipe Explosion Victims to Get Federal Help

Jul 30, 2007 | Parker Waichman Alonso LLP

Those hardest hit by the Con Edison steam pipe explosion in New York City will be getting some help from the federal government.  Meanwhile, a dentist has filed a second lawsuit against Con Edison, and the utility company has agreed to allow two insurance companies that expect to be inundated with explosion-related claims to observe cleanup of the blast site.

The U.S. Small Business Administration (SBA) will make disaster loans available to businesses impacted by the July 18 explosion and subsequent road closures.  Businesses can apply for low-interest SBA loans up to $1.5 million to replace or repair their establishments, equipment and inventory.  The money can also be used to cover the cost of improvements designed to protect a business against future similar events.  Homeowners in the area can apply for loans up to $200,000 to pay for repairs to real estate and $40,000 to replace or repair damaged possessions.

The Con Edison explosion affected at least 1,000 businesses in one of the country’s most expensive business corridors.  Many stores and restaurants  remained closed for several days, and owners estimated that losses would total hundreds of millions of dollars.  Last week, a coalition of small business owners affected by the blast held a news conference demanding that Con Edison reimburse them for lost business.

Meanwhile, Con Edison announced last week that it had reached an agreement with Travelers Indemnity Company and Allianz Global Risk U.S. Insurance to allow their inspectors to monitor site cleanup.  The companies, which said they anticipate paying out millions in damage claims as a result of the pipe rupture, had filed a court petition to force Con Edison to preserve evidence from the blast.  In the petition, the insurance companies claimed that it was not in the public’s best interest to allow “potentially culpable parties in future possible litigation” to have sole control over the explosion site. 

Finally, a New York City “celebrity” dentist filed suit against Con Edison last Thursday.  Dr. Bruce Haber, whose office is on the 25th floor of a building near the explosion, had to close his office for several days.  Dr. Haber is seeking $25 million in damages from Con Edison to cover the business he lost as a result of the pipe explosion.  This lawsuit follows one filed earlier in the week by Francine Dorf.  Dorf, who worked in a building next to the blast, claims that she is suffering from post-traumatic stress as a result of the disaster.

The July 18 explosion occurred when a 24-inch steam pipe burst.  The resulting explosion sent hot vapor and debris hundreds of feet into the air.  One woman died as a result of the explosion, and as many as 40 people were injured.