NEW YORK CITY-Empire State Building investors have filed suit against Peter and Anthony Malkin charging that the IPO that took the iconic office tower public deprived some investors of as much as $410 million in profits.
The lawsuit filed in New York State Supreme Court in Manhattan on Dec. 24 charges that the Malkins turned down higher offers for the 103-story tower in order to have the Empire State Building as the centerpiece of an IPO that also included 17 other Malkin-owed buildings.
“The Malkins knew or had reason to know that these cash offers, if accepted, would derail the proposed REIT and eviscerate their opportunity to enjoy hundreds of millions of dollars of benefits for themselves,” Marc Postelnek, an investor in the lease-holder, said in the complaint.
Empire State Realty Trust Inc. sold 71.5 million shares for $13 each on Oct. 1. The complaint charges that the $13-a-share price valued the Empire State Building at $1.89 billion, or about $410 million less that the highest cash offer for the building before the IPO, according to Bloomberg News.
“These claims are wholly without merit and we will respond to them in court,” Brandy Bergman, a spokeswoman for the Malkins, said. See story at Bloomberg News.