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A New York judge signaled on Monday he would probably allow the group that controls the Empire State Building to proceed with a plan to sell off the fabled New York landmark as part of a public stock offering despite the objections of dissident investors.

Malkin Holdings wants to roll the 102-story tower in midtown Manhattan into a real estate investment trust with 18 other properties and launch shares on the New York Stock Exchange through an IPO that could generate $1 billion depending upon demand for the shares at the time of the offering.

A small group of investors are seeking to stop Malkin, but on Monday they received a clear indication they were heading for defeat.

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“My tentative view is that this matter is pretty straightforward,” said New York State Supreme Court Justice O. Peter Sherwood, noting that he was leaning toward giving the green light to the Malkin plan. He said he would issue his written decision by the end of Tuesday at the latest.

The building, which ranked as the world’s tallest for four decades after its completion in 1931, is one of the most recognizable features of the New York skyline.

The plan could bring a windfall to the Malkin family, who has ownership stakes in all the properties proposed for the REIT. Its stake could be valued as much as $714 million after the REIT goes public.

The Leona Helmsley estate, a major investor in the company that sublets and manages the Empire State Building and other properties in the REIT, could see its stake valued at about $1.03 billion, according to an filing with the U.S. Securities and Exchange Commission.

OBJECTIONS TO PLAN

The plan requires the support of at least 80 percent of each of three groups of investors in the tower, which is owned by Empire State Building Associates LLC, an entity controlled by Malkin.

Once Malkin reaches that threshold, it claims the right to force holdouts to sell back their units for $100 each unless they fall in line. The units, held by 2,824 investors, could be worth more than $320,000 apiece if the REIT, to be called Empire State Realty Trust Inc, goes public.

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.

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