Just when we thought all was well in the 'Empire State' land and the controversy on taking the legendary building public had finally come to an end with its debut at the New York Stock Exchange (NYSE), another problem has surfaced.
Two shareholders, Mary Jane Fales and Hope Ratner have filed a lawsuit against Peter Malkin and his son Anthony Malkin, the managers of the Empire State Building, accusing them of putting their own interests before the shareholders.
The plaintiffs further claim that the Malkins had rejected higher bids for the building, which could have earned the shareholders about $500 million more than what they received through the Real Estate Investment Trust (REIT), reports The Real Deal.
In the lawsuit, the plaintiffs state that the Malkins "refused to meet with any of the bidders and, to the best of plaintiffs' knowledge, never had one substantive word of dialog with any of them." However, Malkins lawyers state that the allegations are completely 'without merit' and they will reply to the plaintiffs in court, reports Bloomberg.
The tale of the building's journey through the controversy is nothing short of a dramatic movie. After battling with dissident shareholders who opposed the Initial Public Offering Plan (IPO) for almost a year, the Malkins finally managed to secure the required number of votes to take the tower public and make it a part of the country's second largest IPO which aims to raise $1 billion in stock.
Since the Malkins' victory over the opposing shareholders, continuous bids to purchase buildings part of the portfolio poured in. Many affluent developers and investors bet some good cash on the Empire State Building alone. Builder Rubin Schron kick-started the bidding trend with his $2.1 billion offer in June 2013. Other developers like Joe Sitt and Reuven Kahane and a group of investors followed suit with offers reaching up to $2.25 billion. Thor Equities reportedly offered a sum more than $2.5 billion for the building.
At that time, the Malkins sent a letter to the shareholders saying:
"We consider all matters, including unsolicited proposals, consistent with our fiduciary duties, to form a judgment on what action is appropriate. We do not intend to issue a comment until after our review."
However, they won the necessary votes and formed the REIT.
The Empire State Realty Trust (ESRT) debuted on the New York Stock Exchange, Oct. 02, 2013, raising $929.5 million in its Initial Public Offering (IPO) pricing 71.5 million shares at $13 per unit.
Empire State Realty Trust rose 1 percent to $15 in trading, Tuesday Jan. 07, 2014.