Empire State Building IPO settlement approved

The Empire State Building (inset: Judge O. Peter Sherwood)
The Empire State Building (inset: Judge O. Peter Sherwood)

A New York State Supreme Court judge has approved a $55 million settlement between a group of investors in the Empire State Building and Malkin Holdings, the New York Observer reported. The stakeholders had contested Malkin’s plans to include the iconic tower in a new publicly-traded real estate investment trust.

Judge O. Peter Sherwood signed off on the deal earlier today.

“It Is The Court’s intention to approve the settlement,” he said.

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The agreement, contingent on a successful initial public offering raising at least $600 million, calls for an 80 percent cash payment, with the remaining value paid in stock in the new REIT. The plaintiffs will become “operating partners.”

However, an attorney representing a different group of stakeholders — who lodged a separate lawsuit challenging Malkin’s plan to buy out current investors for $100 per share — said he would appeal the judge’s approval of the settlement. Yesterday, that group failed to convince Judge Sherwood that the buyout deal was illegal, a ruling that will also be appealed.

Malkin had secured 94 percent of the investor votes needed to proceed with the IPO as of April 3, as The Real Deal reported. [NYO]Leigh Kamping-Carder