Simpson Thacher & Bartlett is suing its New York landlord, alleging it has refused to acknowledge the law firm's rights to rent abatement, leading to $8 million in damages.

Simpson Thacher "remains unable to continue the reasonable operation of its business," said the firm's breach-of-contract suit filed this week in Manhattan Supreme Court against landlord VBGO 425 Lexington Ave. LLC.

Amid the pandemic, rent disputes between commercial tenants and landlords are now ripe across the country. Jenner & Block is similarly in litigation with its Chicago landlord, with the firm also citing rent abatement provisions in its lease. But Simpson Thacher's lawsuit stands out as a rare public dispute between an Am Law 20 firm and its landlord. The firm's average profits per partner last year were $4.42 million, while it grossed about $1.6 billion in revenue, according to American Lawyer data.

According to its suit, Simpson Thacher signed a lease in 1987 that included a "relatively unique clause" for rent abatement circumstances.

Under the lease, the firm said, Simpson Thacher is entitled to rent abatement when it's unable to use the offices for at least 60 days due to "force majeure" events, which includes circumstances where the government steps in and preempts the tenant's right to occupy its space related to a national or public emergency.

425 Lexington Ave., New York City. Photo: Rick Kopstein/NYLJ

The firm said it complied with COVID-19 shutdown orders from the government, "and has been unable to use and has vacated its law offices at 425 Lexington Avenue since March 22," the suit said, noting the firm has been unable "to continue the reasonable operation of its business" for over 60 days.

New York City on June 22 entered phase two of the state's reopening schedule, which allowed law firms to reopen at 50% capacity. But Simpson Thacher said that the state's order placed "substantial other social distancing and hygiene restrictions" on its access, including restrictions for gatherings in enclosed spaces, workplace activity, movement and commerce, the use of protective equipment, screening and testing, tracing and tracking of employee contact and communications and safety plans.

"For these reasons, [Simpson Thacher] is still operating within the governmental restrictions" from the state's orders, the suit said, and "has been unable to use and has vacated the premises."

The landlord, the firm said, "has refused to acknowledge [Simpson Thacher's] rights to rent abatement under the lease" and has also refused to reimburse Simpson Thacher for rent paid by the firm.

A representative for the landlord could not immediately be reached for comment. According to public records, 425 Lexington was bought in recent years by a real estate investment and advisory firm, Vanbarton Group, whose general counsel Justin Kleinman, did not immediately respond to an email seeking comment.

Simpson Thacher is represented by Patrick Bonner Jr. and John Menz at Menz Bonner Komar & Koenigsberg in White Plains.

A representative for Simpson Thacher said in a statement that "While we typically do not comment on litigation, we can confirm that we have filed a claim for rent abatement against our NY landlord to preserve our rights under a provision in our lease agreement and have continued to pay rent while reserving our rights."