Attorney General Reviewing Helmsley Estate Sale


The New York State Attorney General’s office is reportedly reviewing the Leona M. Helmsley estate’s liquidation of its stake in the properties launched as part of the Empire State Realty Trust REIT last month, which includes the Empire State Building.

The process will begin once the Helmsley estate files a final accounting of the sale of all its assets, which typically takes between six and 12 months, according to The Real Deal.

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Leona Helmsley (Photo: Keith Bedford, Getty)
Leona Helmsley (Photo: Keith Bedford, Getty)

While Malkin Holdings had suggested that the Helmsley’s “exchange value” for the properties was $1 billion of the total $4.2 billion, the publication’s review of public records shows that it received $727 million: $491.6 million for its stake in the Empire State Building, and the rest from its stake in 1333 Broadway, 60 East 42nd Street301 Madison Avenue, 1350 Broadway, 1765 Broadway, 501 Seventh Avenue and 1359 Broadway.

The lower value is in stride with the relatively low price the stock has traded at, coming out of the gates at just $13 early last month and not yet realizing the gains that some expect. But the trust was unabashed in announcing the news to expand its charitable endeavors.

Earlier this month reports indicated that the Leona M. and Harry B. Helmsley Charitable Trust, which received the majority of the proceeds from the ESRT deal, would use $660 million of the funds to expand its educational and medical funding.

The trust’s past work helped finance research that discovered 20 different types of bacteria that are present in the gut of someone with Crohn’s Disease, and in the past gave $33 million to the Crohn’s and Colitis Foundation of America $33 million, as well as $2.5 million to diabetes researcher Dr. Mark Atkinson, who studies type 1 diabetes.

But if the cause lives in the shadow of Ms. Helmsley, her record isn’t exactly squeaky clean. In 1989 Ms. Helmsley received 16 years in prison for a variety of tax offenses, resulting in millions of dollars owed.

“We don’t pay taxes,” she once said, according to Time. “Only the little people pay taxes.”

Peter Malkin and Anthony Malkin of Malkin Holdings, which manages the iconic building, were behind the push to go public with Empire State Realty Trust and they did so after months of contentious lawsuits, investor squabbles and multiple bids to purchase the Empire State Building, including offers from Rubin Schron and Joe Sitt that came in unsolicited at more than $2 billion.

Opponents of the REIT, like Jason Meister of Avison Young, who represented both Mr. Schron and Mr. Sitt in their bids, still claim that the original investors were misled into believing the stock would trade higher. Appearing recently on Fox News, Mr. Meister claimed investors were told the exchange value in the REIT was $323,000 per unit, while they are getting just $223,000 per unit at the $13 trading price. The stock price, however, could of course fall or rise.

ESRT shares began trading its initial public offering, 71,500,000 shares of Class A common stock, at $13 on the New York Stock Exchange in early October, and the stock has fluctuated between $12.65 and $14.90.