(Page 2 of 2)
Some of the opponents object to the 50-50 split of ownership of the property between the investors and the company that manages the Empire State Building. The Helmsley estate owns a majority of the management company, while the Malkins own a small minority.
Opponents of the REIT plan contend that Malkin lost the right to force holdouts to sell their holdings in 2001, when he converted Empire State Building Associates into a limited liability company from a partnership. They argued that the forced-buyout provision violated a 1994 state law.
But the judge said he was leaning toward ruling that the investors were not members, who run and make most of the decisions for the limited liability company but were participants who are considered owning passive stakes with limited decision-making powers.
Richard Edelman, who along with his cousin spearheaded the campaign against the proposed REIT, said he would have no choice but to vote for it if Malkin is successful in getting the 80 percent.
“Of course we do that,” Edelman said. “I’m not an idiot. We’ve been talking about it for a year. All that was in question was that the status quo could prevail or the Malkins could suffer a horrible loss, and the status quo prevailed.”
A spokeswoman for Malkin Holdings declined to comment on the judge’s statement.
Last month Malkin filed regulatory documents that said it had garnered about 95 percent of the investor votes it needs to cross the 80 percent threshold.
A representative for Malkin Holdings declined to disclose the exact number of units that had been cast for the plan.
Malkin, which began soliciting votes in January, can continue to do so until the end of next year and can stop once it reaches the threshold.