Empire State Building investors claim losing $410M in IPO, file lawsuit against New York skyscraper's managers
New York skyscraper Empire State Building's managers were sued over claims they deprived thousands of early investors of as much as $410 million in profit when they took the city's landmark building public last October.
According to Bloomberg, Peter Malkin and his son Anthony, the skyscraper's managers, wrongfully turned down higher offers for the standalone 103-story tower in favor of making it the centerpiece of a real estate investment trust (REIT).
Based on a proposed class-action lawsuit, Malkin's move would drive up the value of 17 other buildings in the group. The said lawsuit was filed on December 24 in a Manhattan state court, the report said.
Empire State Realty Trust Inc. sold 71.5 million shares for $13 apiece on October 1. The sale culminated an almost two-year quest by the Malkins to take the iconic skyscraper and 20 other New York-area properties public. The process had also been marked by battles with some of the tower's longtime investors, Bloomberg said.
The initial public offering price of $13 per share valued the Empire State Building at $1.89 billion. This is about $410 million less than the highest cash offer for the building before the IPO, the complaint said.