July 7 (Bloomberg) -- The Empire State Building’s managers asked a judge to dismiss a lawsuit over claims they deprived thousands of early investors of as much as $410 million in profit when they took the New York skyscraper public.
The managers, Peter Malkin and his son, Anthony, gained immunity from such litigation when they reached a $55 million settlement in an earlier, related case, their lawyer said at a hearing today in Manhattan state court.
“The question is, what did we get for our $55 million,” said the managers’ lawyer, Thomas Dewey. “We got a broad release” from such future claims.
Judge O. Peter Sherwood, who has overseen the litigation and approved the settlement, said at the end of the hearing he was inclined to believe the accord applied to the new lawsuit, and that he would issue a written order later. If it does apply, the case will be dismissed.
The Malkins wrongfully turned down higher offers for the skyscraper by itself in favor of making it the centerpiece of a real estate investment trust, or REIT, driving up the value of 17 other Malkin-owned buildings in the group, the investors said in the proposed class-action lawsuit filed Dec. 24.
John J. Rizio-Hamilton, one of the class-action lawyers, said today that the settlement doesn’t apply to the new case because it relates to an offer for the Empire State Building alone, and not any other properties in the group.
Empire State Realty Trust Inc., whose properties include the Empire State Building, sold 71.5 million shares for $13 each on Oct. 1. The sale culminated an almost two-year quest by the Malkins to take the iconic skyscraper and the other properties public, a process marked by battles with some of the tower’s longtime investors.
The $13-a-share price valued the Empire State Building, completed in 1931, at $1.89 billion, or about $410 million less than the highest cash offer for the building before the IPO, according to the complaint.
The case is Postelnek v. Malkin, 654456/2013, Supreme Court of the State of New York (Manhattan).
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