'Artcorp' and Curing Improper Assignments
While I totally agree with the conclusions reached by the authors of "Yellowstone Injunctions: Timeliness is Critical" that the 'Reisenberger' court held that assignments are per se incurable, the authors' reasoning is questionable in light of the First Department's decision in 'Artcorp Inc. v. Citireach Realty Corp.'
December 11, 2015 at 06:12 PM
3 minute read
While I totally agree with the conclusions reached by the authors of “Yellowstone Injunctions: Timeliness is Critical,” (Dec. 9) that the Reisenberger court held that assignments are per se incurable, the authors' reasoning is questionable in light of the First Department's decision in Artcorp Inc. v. Citireach Realty Corp., 124 A.D.3d 545 (1st Dept. 2015).
In sum, the Artcorp court found that a tenant may be able to overcome the incurability of an assignment by alleging “its willingness to cure the allegedly improper assignment of its shares, or [that it] had the ability to do so either by transferring its shares back to the deceased owner's estate … or by seeking consent from the landlord.”
Thus, under Artcorp, a tenant need only perfunctorily proclaim speculative or hypothetical facts by which it may be able to undo the assignment at issue in order to meet its pleading burden on a Yellowstone application. Indeed, the First Department even went so far as to state that the assignment could be arguably curable simply by alleging that “consent may be obtained after the assignment and even in the absence of a lease provision authorizing this post assignment cure.”
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