Investors slap Malkins with new suit over Empire State IPO
With similar cases dismissed in New York, plaintiffs now trying federal court
UPDATED, Dec. 22, 11:06 a.m.: Empire State Building investors fired off another suit against embattled managers Peter and Anthony Malkin claiming they were bilked out of profits in the building’s initial public offering.
The plaintiffs claim the Malkins cost investors $234 million by rejecting higher offers for the iconic building, according to Bloomberg.
Similar suits by building owners were dismissed by a Manhattan state court in July.
The latest suit, filed in federal court, also claims the Malkins issued false statements to secure the 80 percent of unit-holder votes necessary to include the building in the REIT, scheming to “usurp power, revenue, and ultimately the building itself” from the owners.
“These claims are wholly without merit and we will respond to them in court,” Brandy Bergman, an Empire State Realty Trust representative, told The Real Deal.
The trust picked up the property for $1.89 billion, hundreds of millions less than investors such as Joseph Sitt and Rubin Schron offered.
Empire State Realty Trust was formed in October 2013. A fund managed by Andrew Penson, owner of Grand Central Terminal, is a plaintiff in the suit, Bloomberg reported.[Bloomberg] — Tess Hofmann