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<b><i>Yellowstone</i></b> Injunctions When Prompt Cure Is Impossible

BY Alexander Lycoyannis
April 01, 2017

Most real estate practitioners are well acquainted with the Yellowstone injunction and its importance in preserving the status quo while allegations that a commercial tenant has breached its lease are litigated. For the uninitiated, Supreme Court will issue a Yellowstone injunction tolling the running of a cure period and staying the landlord's efforts to evict the tenant, pending the litigation and resolution of the underlying action, where the plaintiff: 1) holds a commercial lease; 2) was served with a default notice threatening to terminate the tenancy; 3) sought a Yellowstone injunction prior to the expiration of the cure period set forth in the notice; and 4) is prepared to, and maintains the ability to, cure the alleged lease violation(s) by any means short of vacating the subject premises. See, e.g., Graubard Mollen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Associates, 93 NY2d 508.

Timeliness of the Motion

While all four factors must be satisfied, the third Yellowstone prong — timeliness of the motion — is especially important. Where a tenant fails to seek a Yellowstone injunction prior to the expiration of the cure period set forth in the default notice, the motion will be denied, the lease will terminate and Supreme Court will be powerless to reinstate the tenancy. See, e.g., Three Amigos SJL Rest., Inc. v. 250 West 43 Owner LLC, 144 AD3d 490; 166 Enterprises Corp. v I G Second Generation Partners, L.P., 81 AD3d 154. One day, or even one hour, can make all the difference between saving a long-term commercial tenancy into which vast resources have been invested, and subjecting the tenant to possible eviction in a holdover proceeding.

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