Malkin prepares for next round in decade-long Helmsley dispute.

Anthony Malkin, president of W&M Properties, vowed that the firm will continue its legal battle to oust Helmsley Spear as the managing agent for a number of properties owned by W&M Properties--including the Empire State Building--despite having lost a court appeal last week.

"We're going to take it to the Supreme Court," Malkin said. "This appeal is only another step in the legal process."

The appeal was the second in a seesawing string of litigation that began with a 2001 arbitration ruling in Helmsley Spear's favor. A subsequent appeal launched by W&M Properties successfully overturned that decision.

"We got this completely bizarre arbitration ruling and the appeals court supported us in a vote 5-0," Malkin said.

"This decision by the higher appeals court had nothing to do with the merits of our case but with the right of a court to overturn an arbitrator's decision. We think we have a very strong case going to the highest court."

According to court documents, the outcome of the first appeal went in W&M's favor because the court found the original arbitration panel had incorrectly ruled that Helmsley Spear, after a change in ownership in 1997, was a valid successor to the contract to manage W&M's buildings. Leona Helmsley sold the company to a partnership between Irving Schneider and the late Alvin Schwartz, but the court decided that their management contract with W&M should have been found void by the arbitration panel because, under the new ownership, Helmsley Spear had become a completely different company with new "officers, directors, shareholders, management personnel, financial structure and fewer properties under management than (the former) Helmsley-Spear."

The second appeal hinged more on the legal appropriateness of overturning an arbitration panel's decision for anything less than an egregiously unjust ruling.

The central issue Malkin says, is Helmsley Spear's sub par performance as the leasing agent and manager of the group of buildings, which include 1400, 1350, 1333, and 1330 Broadway. Malkin claims that all five of W&M's buildings under Helmsley Spear's control suffer from high vacancy. To illustrate his point, Malkin referenced the turnaround of 501 Seventh Avenue, a building owned by the firm that, up until recently, was managed by Helmsley Spear.

"It was 38% occupied when they were running the place," Malkin said. "We got them out of there and put in CBRE and now the building is close to 100% occupied."

Helmsley Spear's departure from that property also allowed W&M Properties to overhaul what had become an antiquated building, Malkin said, a renovation that won it BOMA's 2005-2006 Renovated Building of the Year award.

Lawyer Thomas Graf, who represented Helmsley Spear in the appeal, doubted that W&M Properties would be successful in an attempt to bring its case to the Supreme Court.

"We believe the court's ruling that confirmed the sweeping success in arbitration for Helmsley Spear is sound and well reasoned," Graf said. "We doubt there will be another appeal."