Commercial Division Blog
Accounts Receivable are Tangible Assets
On May 1, 2020, the Fourth Department issued a decision in Violet Realty, Inc. v. Amigone, Sanchez & Mattrey, LLP, 2020 NY Slip Op. 02592, holding that accounts receivable are tangible assets, explaining:
We agree with plaintiff, however, that the court erred in granting defendant's cross motion insofar as it seeks a determination that defendant's accounts receivable are not tangible assets under the lease, and we modify the order and judgment in appeal No. 1 accordingly. A written agreement that is clear, complete and subject to only one reasonable interpretation must be enforced according to the plain meaning of the language chosen by the contracting parties. Additionally, it is a common practice of New York courts to refer to dictionaries to determine the plain and ordinary meaning of the words in a contract. Tangible assets, as defined in the sixth edition of Black's Law Dictionary, which was current when the lease was executed, expressly includes accounts receivable in the definition. We conclude that the court's determination that accounts receivable are not tangible assets under the lease does not comport with the plain meaning of tangible assets.
(Internal quotations and citations omitted).
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