 |
|
|
Something new in your business? Click here to submit your business press release Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery |
|
|
Empire State Building IPO hurt investors, lawsuit claims [December 27, 2013] By Jonathan Stempel NEW YORK (Reuters) — Investors in the Empire State Building have filed a lawsuit accusing the real estate magnates who took it public of short-changing them $300 million by refusing to sell the iconic skyscraper at a premium price.
According to a complaint filed on Tuesday in a New York
state court in Manhattan, Peter Malkin and his son
Anthony put their own interests ahead of the building's
investors by spurning all-cash offers of as much as $2.3
billion for the building and $1.4 billion for Empire
State Building Associates LLC, which held the title and
master lease. Instead, the Malkins put the landmark building and 17 other properties into Empire State Realty Trust Inc <ESRT.N>, whose October 1 IPO valued the property at just $1.89 billion and ESBA at just $1.1 billion, according to the complaint. |
|
The lawsuit by plaintiff Marc Postelnek seeks
class-action status on behalf of more than 2,800 investors who
hold shares in ESBA, which was created in 1961 and was
supervised by a Malkin company, Malkin Holdings LLC. It claimed the Malkins acted in bad faith by aborting a "bidding
war" for the building, and instead enriched themselves by
hundreds of millions of dollars through an IPO. "Given their positions of control and authority over the fate of
the Empire State Building, the Malkins had a duty to act in the
best interests of their investors," the plaintiffs' lawyer, John
Rizio-Hamilton, a partner at Bernstein Litowitz Berger &
Grossmann, representing Postelnek, told Reuters. "By failing to
properly consider offers to maximize the building's value, the
Malkins breached that duty." The lawsuit seeks to recover profit that building investors
allegedly lost because of the Malkins' refusal to sell. Empire State Realty Trust, a real estate investment trust, is a
successor to Malkin Holdings. "These claims are wholly without merit and we will respond to
them in court," a spokeswoman for the REIT said on Thursday. ESBA had been created by Lawrence Wien, the father-in-law of
Peter Malkin, and the shares were sold privately. Postelnek oversees a trust for his grandmother, Mabel Abramson,
one of the original ESBA investors. Opened in 1931, the 102-story Empire State Building was the
world's tallest building for about four decades, until it was
passed by the original World Trade Center's north tower. King Kong climbed the Empire State Building in a 1933 movie, and
Tom Hanks and Meg Ryan finally met there in a climactic scene of
the 1993 movie "Sleepless in Seattle." Empire State Realty Trust went public at $13 per share, the low
end of the forecast range. In Thursday afternoon trading, the stock was down 5 cents at
$15.30 on the New York Stock Exchange. The case is Postelnek v. Malkin et al, New York State Supreme
Court, New York County, No. 654456/2013. (Reporting by Jonathan Stempel in
New York; editing by Dan Grebler) [© 2013 Thomson Reuters. All rights reserved.] Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
|
 |
|
|
|
|
|
|
