Helmsley Estate Driving Empire State Building IPO, Malkins Say
By David M. Levitt
May 31 (Bloomberg) -- The company that controls Manhattan’s
Empire State Building wants to sell shares to the public so the
estate of Leona Helmsley can liquidate its stake in the iconic
skyscraper, according to a letter to investors.
The Helmsley estate has the power to block decisions about
the buildings, Peter Malkin and his son Anthony said today in a
letter to shareholders of Empire State Building Associates LLC
and two other entities that control Manhattan buildings. Some of
those investors have sued, claiming they would be shortchanged
by the terms of a plan for a $1 billion initial public offering.
“The status quo will not continue,” the Malkins said in
the letter, which was filed with the U.S. Securities and
Exchange Commission. “Unavoidable, material change is coming,
driven by the requirement for the executors under Leona
Helmsley’s will to sell her estate’s ownership interests in
properties supervised by Malkin Holdings.”
At stake is the future ownership and control of the 102-
story Empire State Building along with other New York-area
buildings controlled by Malkin Holdings LLC in conjunction with
the Helmsley estate. Empire State Realty Trust Inc., the company
that controls the skyscraper, filed a proposal on Feb. 13 to
become a publicly traded real estate investment trust.
In March, investor Leon Meyers sued in New York State
Supreme Court, accusing the Malkins and the Helmsley estate of
breaches of fiduciary trust. It was the first of at least three
purported class-action lawsuits filed by minority investors.
Meyers’s complaint accuses the defendants of “self-interested
consent solicitations” that fail to adequately explain or offer
alternatives to investors.
‘Best Path’
Eileen Sullivan, a spokeswoman for the Helmsley estate,
said she couldn’t immediately comment. A telephone call to
Richie Edelman, a San Diego-based minority investor who operates
a website critical of the offering, wasn’t immediately returned.
“If the Helmsley estate sells its interests to an unknown
third party, there is no predicting whether that buyer will
agree with Malkin Holdings,” the Malkins wrote in the letter.
“Resulting disagreements could harm your interests. We strongly
believe the options presented in our preliminary filing -- a
consolidation and IPO or a portfolio sale -- are the best path
for investors.”
By David M. Levitt
May 31 (Bloomberg) -- The company that controls Manhattan’s
Empire State Building wants to sell shares to the public so the
estate of Leona Helmsley can liquidate its stake in the iconic
skyscraper, according to a letter to investors.
The Helmsley estate has the power to block decisions about
the buildings, Peter Malkin and his son Anthony said today in a
letter to shareholders of Empire State Building Associates LLC
and two other entities that control Manhattan buildings. Some of
those investors have sued, claiming they would be shortchanged
by the terms of a plan for a $1 billion initial public offering.
“The status quo will not continue,” the Malkins said in
the letter, which was filed with the U.S. Securities and
Exchange Commission. “Unavoidable, material change is coming,
driven by the requirement for the executors under Leona
Helmsley’s will to sell her estate’s ownership interests in
properties supervised by Malkin Holdings.”
At stake is the future ownership and control of the 102-
story Empire State Building along with other New York-area
buildings controlled by Malkin Holdings LLC in conjunction with
the Helmsley estate. Empire State Realty Trust Inc., the company
that controls the skyscraper, filed a proposal on Feb. 13 to
become a publicly traded real estate investment trust.
In March, investor Leon Meyers sued in New York State
Supreme Court, accusing the Malkins and the Helmsley estate of
breaches of fiduciary trust. It was the first of at least three
purported class-action lawsuits filed by minority investors.
Meyers’s complaint accuses the defendants of “self-interested
consent solicitations” that fail to adequately explain or offer
alternatives to investors.
‘Best Path’
Eileen Sullivan, a spokeswoman for the Helmsley estate,
said she couldn’t immediately comment. A telephone call to
Richie Edelman, a San Diego-based minority investor who operates
a website critical of the offering, wasn’t immediately returned.
“If the Helmsley estate sells its interests to an unknown
third party, there is no predicting whether that buyer will
agree with Malkin Holdings,” the Malkins wrote in the letter.
“Resulting disagreements could harm your interests. We strongly
believe the options presented in our preliminary filing -- a
consolidation and IPO or a portfolio sale -- are the best path
for investors.”
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