R&E Secures Court Order Requiring Bond and Continued Payment of Rent by GAP and Old Navy
New York State Supreme Court, New York County, Decided July 22, 2020
Featuring Warren A. Estis, Norman Flitt and Alexander M. Estis
Rosenberg & Estis secured a 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. R&E 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.