Newspaper article International Herald Tribune

Despite Risks, a Landmark Moves toward I.P.O

Newspaper article International Herald Tribune

Despite Risks, a Landmark Moves toward I.P.O

Article excerpt

The wrinkle in the deal for the Empire State Building is a lawsuit brought by dissident stakeholders who argued that certain provisions of the deal violated New York State law.

Investors hoping to own a piece of the Empire State Building may soon get their chance.

Despite the fact that legal questions are still swirling around the deal, it is expected that the planned public offering of the 102- story tower will proceed.

"I think they'll likely move forward with the I.P.O. as soon as possible," said Eric Jensen, a lawyer with Cooley L.L.P. "They just have to disclose all of the risks so investors know what they're getting into," he added.

As fine print goes, there are some pretty big risks, including the possibility that the whole public offering could be undone.

Last week, stakeholders that own the Empire State Building voted in favor of a plan to sell it as part of an initial public offering that is expected to raise as much as $1 billion.

But the wrinkle in the deal is a lawsuit brought by dissident stakeholders who argued that certain provisions of the deal violated New York State law. A judge ruled a few weeks ago that the vote was legal, but the dissident shareholders filed motions for a stay of the ruling and an appeal of the ruling.

A lawyer for the dissidents, Stephen B. Meister, said the stay should be decided any day now, but that the appeal would probably not be heard until late autumn. He has questioned how the public offering could go forward if a judge could later rule that the vote was invalid, potentially undoing any public offering.

"From a disclosure standpoint, describing how an I.P.O. could be unwound after it is done is tough," said Steve Thel, a professor at Fordham Law School. "But from a strategic standpoint, if you don't move forward with the offering, that allows the dissenters to win even though they've lost in court. …

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