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Schulte Roth & Zabel has filed a $10 million lawsuit claiming that its Manhattan landlord failed to abide by lease provisions requiring rent abatement in an emergency.
The lawsuit, filed Friday in Manhattan state court, says the COVID-19 pandemic is a public health emergency that prevented it from using its office space, report Thomson Reuters Legal, the New York Law Journal and Law360.
Schulte Roth cites a lease provision that entitles it to abatement when it can’t use its offices for the ordinary conduct of business for more than 15 consecutive days because of “unavoidable delays.” The lease defines unavoidable delays to include delays caused by “laws, governmental preemption in connection with a national emergency or by any legal requirements … or other emergency.”
The suit says Schulte Roth was forced to vacate its office March 13 because of executive orders in New York, although it has maintained small, rotating crews to manage simple office functions.
Schulte Roth says it sought rent abatement March 31, but its landlord rejected its request in an April 4 letter. The letter says the law firm was only entitled to a rent abatement in the event of a breach of the lease by the landlord. Schulte says it continued to pay its rent—under protest.
Schulte Roth’s landlord is Metropolitan 919 3rd Avenue, which is owned by the SL Green Realty Corp. The landlord told Thomson Reuters Legal and Law360 in a statement that the lawsuit is without merit.
“The attempt by Schulte Roth & Zabel and other well-heeled, white shoe firms to take advantage of the pandemic and try to weasel out of their financial commitments at a time when the vast majority of New Yorkers continue to meet their obligations poses a very serious threat to New York City and its economy,” the statement said.
Other law firms involved in rent abatement lawsuits include Simpson Thacher & Bartlett and Jenner & Block.
Metropolitan 919 3rd Avenue is represented by Janice Mac Avoy, a partner at Fried, Frank, Harris, Shriver & Jacobson.
Mac Avoy told the New York Law Journal that law firms are working at full capacity, and they can do that because landlords are keeping offices open where mail service and technology can be maintained.
ABAJournal.com: “Fighting landlord’s suit, Jenner & Block says COVID-19 pandemic entitles it to rent abatement”