The United States District Court for the Southern District of New York (the “Court”) decided in Gap Inc. v. Ponte Gadea N.Y. LLC on March 8, 2021 that a retail tenant will not be able.
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COVID-19 Update: Can t Lose What You Never Had: Court Rejects All Legal Theories Asserted by Retail Tenant Wednesday, May 19, 2021
Court”) decided in
Gap Inc. v. Ponte Gadea N.Y. LLC on March 8, 2021, that a retail tenant will not be able to use the COVID-19 pandemic as an excuse for not making rent payments under multiple legal theories.
This case is one of many cases now before New York courts in the aftermath of New York’s decision to shut down non-essential businesses during the rise of the COVID-19 pandemic. The Gap Inc. (the “
GAP”) commenced the action against its landlord, Ponte Gadea New York LLC (“
Recently, in
Valentino U.S.A., Inc. v. 693 Fifth Owner LLC, Justice Andrew Borrok of the New York County Commercial Division dismissed a complaint brought by Valentino U.S.A., Inc. (“Valentino” or “Tenant”), which sought to rescind or terminate the commercial lease for its Manhattan luxury fashion store and to avoid its rent obligation.[1]
Like many landlord-tenant disputes currently pending or recently decided in light of the COVID-19 Pandemic, this case involved the common law doctrines of frustration of purpose and impossibility. The Commercial Division held that neither doctrine excused Valentino’s rent obligation because the parties’ lease allocated to Valentino the risk that Valentino would not be able to operate its business.