July 22 (Bloomberg) -- The Empire State Building’s managers won dismissal of lawsuits claiming they deprived thousands of early investors of as much as $410 million in profit when the iconic New York skyscraper was taken public.
New York State Supreme Court Justice O. Peter Sherwood threw out the lawsuits, saying the investors agreed not to sue the managers, Peter Malkin and his son Anthony, in settling a related case for $55 million last year. Sherwood issued the ruling July 17 and it was made public yesterday.
The investors argued in their suit, which was filed in December, that the Malkins wrongfully turned down higher offers for the skyscraper by itself in order to drive up the value of 17 other Malkin-owned buildings by making the Empire State Building the centerpiece of a real estate investment trust.
The settlement didn’t release their claims because the offers were made after the pact was effective, according to the complaint. Sherwood said the Malkins’s alleged refusal to consider alternatives was a “core element” of the suit that was settled.
Empire State Realty Trust Inc., whose properties include the skyscraper, 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 skyscraper and 20 other New York-area properties public, a process marked by battles with longtime investors.
Shares of Empire State Realty Trust rose 15 cents, or 1 percent, to $16.45 at 1:26 p.m. in New York. They had risen 27 percent in the past 12 months.
The case is Postelnek v. Malkin, 654456/2013, Supreme Court of the State of New York (Manhattan).
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