Rosenberg & Estis, P.C., Secures Court Order Requiring Bond and Continued Payment of Rent by GAP and Old Navy
Decision Conditions Yellowstone Injunction on Payment of Nearly $3 Million in Monthly Rent and Nearly $6 Million in a Bond
For Immediate Release
Shea Communications, LLC
George Shea, Mark Faris (212) 627-5766
Rosenberg & Estis, P.C. has secured a significant victory against The Gap and Old Navy in New York State Supreme Court in New York County, ensuring that the companies will continue to pay rent during a pandemic-related lease dispute. Warren A. Estis and Norman Flitt, members, and Alexander M. Estis, associate, of Rosenberg & Estis represented 44-45 Broadway Leasing Co., LLC against The Gap and Old Navy before Supreme Court Justice Debra A. James.
The Gap and Old Navy stopped paying required rent for their two flagship retail spaces in Times Square in May 2020. The tenants defaulted on rent in May and June, prompting the landlord to serve both tenants with a default notice. In response, the tenants commenced an action, arguing that a modification of leases was required after store closures during the crisis and seeking a Yellowstone injunction to enjoin the landlord from terminating the leases pending the outcome of the case.
While the court decision grants the requested injunction, it requires the immediate payment of $2,953,733 in rent for July 2020, and also requires tenants to post a bond for $5,842,531 toward rent arears for May and June of 2020. The court further directed The Gap and Old Navy to continue paying rent discounted by 10 percent as a result of the pandemic. “The requirement for the posting of substantial bond in addition to the mandated payment of future rent is a substantial victory for the landlord,” Estis said.
This decision follows several other recent high-profile litigation results by the firm, including a New York State Court of Appeals ruling denying a Yellowstone injunction application related to tenant’s failure to carry appropriate insurance, and a New York State Court of Appeals ruling that Part F of the Housing Stability and Tenant Protection Act of 2019 may not be applied retroactively to rent overcharge cases. The firm also recently secured a major court victory against Amazon on behalf of The Durst Organization, obtained a unanimous dismissal of a multi-million dollar damages claim, won a critical case on a rent overcharge case, and a variety of other cases with industry-wide significance.