It's victory for the Malkins once again!
A New York state judge dismissed a lawsuit that alleged Peter Malkin and his son Anthony Malkin of putting their own interests before that of the shareholders of the legendary Empire State Building, prior to taking the building public.
Justice Peter O. Sherwood declared Monday that the shareholders' lawsuit had no merit because they agreed to a $55 million settlement the Malkins had offered earlier.
At an earlier hearing in a Manhattan Court July 8, Malkins' lawyer said that the owners had "gained immunity" after the shareholders agreed to the settlement. But Judge Sherwood said he would examine the agreement in the new lawsuit and added that the case would be dismissed if the settlement applied to the lawsuit.
On Monday, Justice Sherwood wrote, "the settlement agreement ... contains a covenant not to sue," according to the Associated Press.
The decision marks the end of a longtime shareholder-owner battle revolving around the iconic New York City building.
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 initially 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. But in January this year, a certain number of shareholders sued the Malkins again claiming that the owners had declined better offers for the building and thus deprived them of $400 million in potential profits.
Monday's ruling, which went in favor of the Malkins again, settled the second lawsuit.
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 0.61 percent at $16.55 in afterhours trade.
