Morrison Cohen Appellate Success for Retail Tenant

April 27, 2020 - In a decision that could prove to have lasting significance for retail tenants, our attorneys were able to persuade the Appellate Division, Fourth Judicial Department of the Supreme Court of the State of New York to reverse the grant of a preliminary injunction preventing our client, J.Crew, from closing its store.

J.Crew entered into a multi-year lease with the plaintiff, an owner and operator of a mall in upstate New York. Five years after the commencement of the lease agreement, J.Crew informed plaintiff it was exercising its option to terminate the lease as its annual gross sales failed to equal or exceed the threshold amount.  Plaintiff was granted a preliminary injunction preventing J.Crew from taking steps to terminate the lease.

Ultimately, the Appellate Division rejected the plaintiff's argument that the closure of J.Crew's store would result in the loss of goodwill. The Court held that plaintiff had an adequate remedy in the form of money damages. Moreover, the Appellate Division held “the harm defendants will suffer if forced to keep their 6,000-square foot store open against their will is greater than the injury plaintiff will suffer from the loss of one tenant in the mall…”

Our appellate team included Danielle C. Lesser, Edward P. Gilbert, and Hon. David Saxe (Ret.).

A copy of the decision can be accessed here.