The court affirmed a lower court's decision granting the landlords' motion for summary judgment, after determining the applicable force majeure provisions and common law doctrines the tenants relied on didn't excuse payment obligations.
First in series of articles that will examine specific aspects of the COVID shift in which commercial lease negotiations are seeking protection against unlikely events. Part 1 focuses on casualty provisions.
In a rare ruling, the Cinemark movie theater chain won the chance to keep litigating against its insurance company, seeking losses under a $500 million policy for business interruption from COVID-19.
Can a commercial tenant that is required to be closed during the COVID-19 pandemic be relieved of, or does it have a defense to, the obligation to continue to pay rent? The short answer is possibly yes, but the situation is unprecedented and the answer may have to be determined in litigation.
When cyber attacks succeed, in-house counsel and risk management professionals will look for coverage under their cyber insurance policies. Insurance coverage for such incidents, however, are also present in other policies, and these other policies should not be cast aside.
The COVID-19 pandemic is resulting in landlords and tenants closely reviewing a clause in their lease that was long considered unimportant boilerplate. Yes, we are referring to the "force majeure" provision.
Federal programs have made insurance more readily accessible to protect real property in the event of a flood or an act of terrorism. These programs enable flood and terrorism insurance to be widely available at realistic price points by ensuring that the amount of the premiums payable for such insurance remain at a level that a borrower can afford, which in turn preserves the underwritten economics of the loan transaction.
The new decision is significant because lawsuits against former (and current) officers and directors of debtors commonly are brought, as here, by trusts established under plans of reorganization. Because insurance policies often are the only viable source of recovery for the claims asserted in such lawsuits, this decision potentially opens a pathway to creditor recovery in other similar matters.
From a risk management perspective, festivals now run the gamut on potential liabilities that include collapsed stages, cancelled performances, severe weather, terrorism, alcohol liability, patron bodily harm and death, product liability and breach of contract claims. In essence, music festivals have become a microcosm of live entertainment-related liability exposures.
