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Current Developments in the Commercial Divisions of the
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Posted: January 27, 2018

Yellowstone Injunction Denied; Tenant Did Not Show Ability or Intention to Cure Failure to Pay Rent

On January 16, 2018, Justice Ash of the Kings County Commercial Division issued a decision in Serpin Intl. Gourmet Foods, Inc. v. Brooklyn Kings Plaza, LLC, 2018 NY Slip Op. 30069(U), denying a motion for a Yellowstone injunction because the tenant had not shown that ability or intention of curing its failure to pay rent, explaining:

The purpose of the Yellowstone injunction is to preserve the status quo such that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture. The party requesting a Yellowstone injunction must demonstrate that: (1) it holds a commercial lease; (2) it received from the landlord either a notice of default, a notice to cure, or a threat of termination of the lease; (3) it requested injunctive relief prior to the termination of the lease; and ( 4) it is prepared and maintains the ability to cure the alleged default by any means short of vacating the premises.

Here, Plaintiffs have failed to demonstrate their entitlement to a Yellowstone injunction against any of the Defendants. With regards to Kings Plaza, presuming a threat of termination of its tenancy, Serpin fails to show an ability or intention to cure its default in paying past due rent totaling over $75,000.00. With regards to Queens Center and RPT, the respective leases were properly terminated with the requisite notice pursuant to the terms of the lease. Plaintiffs fail to point to any lease provision entitling them to an extension of the lease term or any other grounds upon which to find that the landlord’s notice of termination was improper.

(Internal quotations and citations omitted) (emphasis added).

We litigate Yellowstone injunctions–a motion to prevent a landlord from evicting a commercial tenant of defaults under the lease–for both landlords and tenants. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding the termination of a commercial lease because of a default under the lease.

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