Meyers says in the complaint that the defendants seek to consummate the proposed transaction through “self-interested consent solicitations that fail to provide the participants with material information sufficient to allow them to make informed decisions regarding whether to support the proposed transaction.” In addition, he argues that the Malkin defendants “failed to consider reasonable alternatives,” which were “potentially more beneficial to the participants, but less likely to be economically beneficial to the defendants,” the complaint says.

Anthony E. Malkin and Peter L. Malkin, president and chairman of Malkin Properties, respectively, own and manage with its affiliates more than 14 million square feet of office, retail, residential and warehouse/distribution facilities across 15 states, including the 2.9-million-square-foot Empire State Building in Midtown Manhattan. The majority of its properties are located in New York City, Westchester County and Connecticut.

On November 29, 2011, Malkin Holdings LLC, the supervisor, caused Empire State Building Associates LLC to file with the SEC a Form 8-K announcing that the supervisor had “embarked on a course of action that could result in Empire State Building Associates LLC becoming part of a newly formed public REIT, according to the complaint. As previously reported by GlobeSt.com, the company said it “is not in a position to disclose more information until documents are filed with the SEC” for legal reasons.

On December 9, the participants in the private entities each received a notice of consent solicitation from Malkin Holdings, as well as a draft prospectus/consent solicitation statement, the complaint says.

If the proposed transaction is consummated, participants in the public LLCs will receive shares of class A common stock in the company, or alternatively, have the option to receive cash for a currently unknown percent of the shares of class A common stock they would have otherwise received, according to the complaint.

According to the registration statement, the closing of the transaction is conditioned only on the approval of the participants in Empire State Building Associates, LLC. Meyers says in the complaint that given that the other public LLCs represent a significant portion of the exchange value, anticipated cash flow and net income of the company, the failure of another public LLC to approve the proposed transaction may prevent it from closing.

In response, Brandy Bergman, a managing director at Sard Verbinnen & Co. and a spokeswoman for Malkin Holdings, tells GlobeSt.com in an e-mail: “This is a baseless lawsuit and it goes without saying that we will vigorously oppose it.”