The lawsuit by plaintiff Marc Postelnek seeks
class-action status on behalf of more than 2,800 investors who
hold shares in ESBA, which was created in 1961 and was
supervised by a Malkin company, Malkin Holdings LLC.
It claimed the Malkins acted in bad faith by aborting a "bidding
war" for the building, and instead enriched themselves by
hundreds of millions of dollars through an IPO.
"Given their positions of control and authority over the fate of
the Empire State Building, the Malkins had a duty to act in the
best interests of their investors," the plaintiffs' lawyer, John
Rizio-Hamilton, a partner at Bernstein Litowitz Berger &
Grossmann, representing Postelnek, told Reuters. "By failing to
properly consider offers to maximize the building's value, the
Malkins breached that duty."
The lawsuit seeks to recover profit that building investors
allegedly lost because of the Malkins' refusal to sell.
Empire State Realty Trust, a real estate investment trust, is a
successor to Malkin Holdings.
"These claims are wholly without merit and we will respond to
them in court," a spokeswoman for the REIT said on Thursday.
ESBA had been created by Lawrence Wien, the father-in-law of
Peter Malkin, and the shares were sold privately.
Postelnek oversees a trust for his grandmother, Mabel Abramson,
one of the original ESBA investors.
Opened in 1931, the 102-story Empire State Building was the
world's tallest building for about four decades, until it was
passed by the original World Trade Center's north tower.
King Kong climbed the Empire State Building in a 1933 movie, and
Tom Hanks and Meg Ryan finally met there in a climactic scene of
the 1993 movie "Sleepless in Seattle."
Empire State Realty Trust went public at $13 per share, the low
end of the forecast range.
In Thursday afternoon trading, the stock was down 5 cents at
$15.30 on the New York Stock Exchange.
The case is Postelnek v. Malkin et al, New York State Supreme
Court, New York County, No. 654456/2013.
(Reporting by Jonathan Stempel in
New York; editing by Dan Grebler)
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