The Malkin Family, owners of the iconic Empire State building, which is the centerpiece of the Empire State Realty Inc., has asked the judge in charge of an infamous shareholder-dispute case to dismiss the lawsuit filed against them.
This is the latest development in the Empire State Building Real Estate Investment Trust (REIT) saga.
At the hearing in a Manhattan Court July 8, Malkins' lawyer said that the owners had "gained immunity" after they had agreed to offer a $55 million settlement to the shareholders, reports Bloomberg.
Shareholders filed a lawsuit against Peter Malkin and his son Anthony Malkin in January, this year, accusing them of putting their own interests before the unit-holders. The plaintiffs further claimed that the Malkins rejected higher bids for the building, which could have earned the shareholders about $500 million more than what they received through the REIT.
In the lawsuit, the plaintiffs stated 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."
Judge O. Peter Sherwood said that he would examine the agreement in the new lawsuit and issue a written order later. The case shall be dismissed if the $55 million settlement does apply to the lawsuit.
Empire State Realty Inc. Saga
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. They offered to pay $100 for each of the $10,000 initally invested to the opposing shareholders.
The objecting minority then called the provision illegal and took the matter to court. The ruling went in favor of the Malkins.
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. 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 of 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, October 2, 2013, raising $929.5 million in its Initial Public Offering (IPO) pricing 71.5 million shares at $13 per unit.
Shares of ESRT closed up 0.54 percent at $16.64 in afterhours trade.
