Malkin Holdings’ buyout provision for shareholders who voted against taking the Empire State Building public has been ruled legal in State Appellate Court.
The company, headed by Anthony Malkin, said it would exercise a clause permitting the company to buy out dissenting voters for $100 per share, a tiny portion of the shares’ estimated value of more than $300,000 each. Shareholders against the IPO filed suit, arguing that the move strong-armed them into going along with the plan, forcing them to vote in favor or risk being bought out for next to nothing.
But because the Empire State Building shareholders were not part of a limited liability company, the court found that they were not unfairly pressured, Crain’s reported.
“The motion court promptly denied appellants’ application for a declaration that the buyout provisions violate the Limited Liability Company Law since appelants are not ‘members’ in the limited liability company who are entitled to the fair value appraisal protections,” the judgement said. [Crain's] — Julie Strickland