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New York Court Issues Two New Decisions Rejecting Impossibility of Performance and Frustration of Performance as COVID Lease Defenses

Client memorandum | December 21, 2020

In a prior client alert entitled New York Court Rejects Impossibility of Performance as COVID Lease Defense (Aug. 11, 2020), we identified two recent decisions in which New York courts at a preliminary stage rejected commercial tenants’ arguments that conditions precipitated by the COVID-19 pandemic excused the tenant’s payment of rent obligations under the impossibility of performance doctrine.  In two recent cases decided on the merits, 1140 Broadway LLC v. Bold Food, LLC, KBFK Restaurant Corp. (Index No. 652674/2020) (the “Bold Foods Case”) and 35 East 75th Street Corporation v. Christian Louboutin L.L.C. (Index No. 154883/2020) (the “Christian Louboutin Case”), a New York court has again rejected commercial tenants’ defenses under the frustration of purpose and impossibility of performance doctrines, ultimately holding that commercial tenants remain on the hook for unpaid rent despite the impacts of the COVID-19 pandemic on their businesses.

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