The controversial move of making the historic Empire State Building public has just crossed another hurdle after Justice O. Peter Sherwood, the New York State Supreme Court judge, declared Wednesday, May 1 that a potential buy-out plan was completely legit
In March 2013, shareholders in favor of an anticipated Initial Public Offering (IPO) had proposed to buy out some opposing investors for $100 per share. The provision meant that the investors would receive $100 for every $10,000 initially invested. The majority shareholders also proposed that the opponents could avoid being bought out if they changed sides and decided to vote for the IPO within 10 days of receiving a written notice.
Stephen Meister, the attorney representing the opposing investors, called the notice period "impermissibly short". The opposing investors also asserted that the proposal was "unfair" and illegal, taking the matter to court.
However, Judge Sherwood denied the motion and declared that the buy-out plan did not violate any laws. According to the laws governing a Limited Liability Company (LLC), the applicants do not have any right to assert appraisals because the buy-out plan is neither a consolidation nor a merger. Sherwood explained that appraisal appeals can only be considered if the company was a consolidated or merged firm, reports USA Today.
Meister said that he was now planning to appeal the ruling once again and urge for an emergency relief - like a hold or stay order, reports Bloomberg.
"I hope the Meister law firm and the investors who brought this compelling case win on appeal," Richard Edelman, grandson of an original unit-holder said to Bloomberg.
This decision has gone in favor of the Malkins, owners of Malkins Holdings LLC, the company that controls the building.
"We are pleased by the court's ruling and are proceeding with our solicitation with the intention of closing as soon as we reach the approval threshold," a Malkin spokeswoman said to the Wall Street Journal.
The IPO proposition had received large support from the building's shareholders. However, for the IPO to proceed, the plan needs 80 percent favorable votes from the 3300 unit-holders of the Empire State Building Associates LLC. However a small group of investors is still opposing the plan.
The Malkins have already acquired 75 percent "yes" votes. They now hope to accumulate the remaining percentage to roll the building into the long awaited public Real Estate Investment Trust (REIT).
Read more on the IPO Proposal, here.
