A great lawyer knows when not to litigate. Oftentimes a commercial tenant in a failing building is left with little choice but to either suffer through reduced services or litigate for damages when things further deteriorate. However, with the right counsel, such a seemingly desperate situation can turn into a profitable opportunity, as one of Adam Leitman Bailey, P.C. ’s clients recently discovered. Adam Leitman Bailey, P.C. ’s client, who is part of a successful high end Manhattan dentistry practice, originally engaged the Firm to address issues with his landlord’s diminished services. The dental practice had invested nearly $1 million in building out its practice and had four years left on its lease; but everything was not going smoothly as the landlord was strapped for cash and looking to sell the building. Our client wanted out of the lease and out of the building with some cash in return for its original investment.

Although Adam Leitman Bailey, P.C. immediately recognized that this was not a situation that would be easily resolved by litigation, we took an aggressive stance with landlord’s counsel, making it clear from the start that its choices were very limited: buy out our client, or suffer a litigation that would severely complicate its potential sale of the building. These were, of course, not idle threats when Adam Leitman Bailey, P.C. regularly – and very successfully – litigates claims for loss of services and potential constructive eviction in similar situations.

After months of complicated negotiations, Adam Leitman Bailey, P.C. was able to secure an extraordinarily favorable deal for our client: in exchange for a $500,000 payout from the landlord, the dental practice would be released from its lease, with 16 months before leaving to secure and build out a new practice at another location. However, even with this mutually beneficial situation, complications arose that Adam Leitman Bailey, P.C. deftly rebuffed for our client: our client had already secured a new lease and prepared to when the landlord’s financial instability left it unable to pay its creditors, and the building was put into court-appointed receivership with the very real prospect that our client’s payout would fall into a line of creditors taking pennies on the dollar, if anything.

However, as is often the case, Adam Leitman Bailey, P.C. had an excellent relationship and reputation with the receiver; and over the course of many months of discussions, the Firm was able to get the receiver to recognize the validity of the buy-out and work with the firm and the landlord to prioritize our client’s situation, with the receiver consistently emphasizing the work of our firm on behalf of our client.

Finally, after many months of further negotiations, Adam Leitman Bailey, P.C. was able to secure a payout from the landlord for our client that, while a reduction from the original amount, guaranteed a substantial cash payment, in addition to forgiveness of more than $65,000 in back rent, without

the need to join a list of creditors fighting for scraps. Thanks to the tireless work of our legal team, our client’s practice is flourishing in a beautiful new location, away from its prior troubles, and with the prior landlord’s money already earning interest in the bank.

Adam Leitman Bailey and Eric S. Askanase negotiated this successful resolution as part of their work in Adam Leitman Bailey, P.C. ’s supreme court practice group.