An appeals court panel on Tuesday upheld a $55 million settlement struck between Anthony Malkin’s Malkin Holdings and former investors in the Empire State Building — a victory for the Malkin family and the highly-contested REIT conversion of King Kong’s favorite skyscraper.
The panel upheld the original terms of a 2012 settlement inked in wake of a class action lawsuit by the investors, who claimed Malkin’s Empire State Realty Trust unfairly compensated them after a roughly $1 billion initial public offering that took the REIT’s prized, flagship building public.
While Malkin Holdings originally agreed to pay the $55 million settlement, the investors later appealed the decision, calling it “grossly inadequate and unfairly apportioned.” But in a ruling Tuesday, the New York State Supreme Court’s Appellate Division denied the attempt to modify or dismiss the final settlement price.
The Empire State Building stakeholders claimed the Malkins breached their “fiduciary responsibility” by spurning “a multitude of premium all-cash offers” for the property in favor of taking it public. Rubin Schron’s Cammeby’s International offered $2 billion for the Empire State Building in 2013, as The Real Deal reported, while Joe Sitt’s Thor Equities was willing to bid $1.4 billion.
The suit was one of several legal complaints that have plagued Empire State Realty Trust following its IPO, which closed in October 2013. Last year, attorneys for the Malkin family asked a judge to dismiss a separate, $410 million lawsuit on the grounds that they had gained immunity in relation to the $55 million settlement.