Grand Central owner teams up with ESB investors in blocking settlement regarding IPO

Andrew Penson, the owner of Grand Central Terminal, has teamed up with the group of Empire State Building investors seeking to block the settlement of a class-action suit against Malkin Holdings for their plan to include the iconic building in a public real estate investment trust, Bloomberg News reported. Penson has filed two affidavits in support of the group, which say the IPO would cause “vast harm” to the roughly 2,800 building co-investors.

Penson himself is affiliated with a company called Empire States Building Associates LLC, which is invested in the tower. ESBA holds public securities that give them a stake in the building, and in the affidavit, Penson refers to the class-action settlement as “grossly unfair to participants of ESBA such as myself.”

As previously reported, the ESBA participants asserted in their memorandum opposing the motion for certification that “the proposed settlement — just $55 million — amounts to barely 1 percent of the value of the roll-up, and is a tiny fraction of what the Malkin defendants are stealing from the ESBA investors.” They added that “to add insult to injury, while the Helmsley estate — the majority owner of the operating lessee of the [Empire State Building] — is paying a portion of the settlement, it is unclear how much if anything the Malkin defendants are paying.”

Still, as The Real Deal reported, the Securities Exchange Commission in late December gave the green light for the Empire State Realty Trust’s IPO — meaning it can happen in the coming months. [Bloomberg News via Crain’s] —Zachary Kussin