In re Empire State Building Associates, L.L.C Participants Litigation

Court: New York State Supreme Court, Commercial Division
Case Number: 654456/2013
Judge: Hon. O. Peter Sherwood
Case Contacts: Mark Lebovitch, John Rizio-Hamilton,

This is a class action filed on behalf of the passive investors in Empire State Building Associates L.L.C. (“ESBA”) against the individuals and entity that controlled the Empire State Building, namely Anthony E. Malkin, Peter L. Malkin and Malkin Holdings LLC (collectively, the “Malkins”).  This action asserts the Malkins, in bad faith, rejected several premium all-cash offers to acquire the iconic Empire State Building, and instead pursued an initial public offering for a real estate investment trust, through which the Malkins stood to receive over $730 million in personal benefits.

Plaintiffs filed a Consolidated Class Action Complaint on February 7, 2014, and on February 14, 2014, Justice O. Peter Sherwood appointed BLB&G as Co-Lead Counsel for the Class.  Plaintiffs allege that instead of exploring whether the unsolicited all-cash premium offers for the Empire State Building and for the ESBA would maximize value for the Participants, as required by the Malkins’ fiduciary duties, the Malkins rejected the offers without ever discussing the offers with the bidders or making any attempts to negotiate the terms of the bid, in order to preserve a self-interested plan to launch an initial public offering of a publicly-traded real estate investment trust that contained the Empire State Building and numerous other lesser-valued properties that the Malkins also controlled.  Plaintiffs further allege that the Malkins spurned the all-cash offers even though they knew or had reason to know that the prices offered by the bidders were hundreds of millions of dollars greater than the value of the Empire State Building, as determined by the REIT’s projected share price.