Lost Asset

Scenario: After 36 years an iconic restaurant to the Upper East Side closed its doors due to the property becoming a development site. Finding a location that met their specific needs, ownership jumped into design prior to securing the lease. During this process it came to Crown’s attention that the second means of egress necessary was through an easement with the neighbor. Crown strongly advised against entering into the new lease prior to having an easement agreement in place. The attorney disagreed.

Crown’s Response: 

• Crown advised that the neighbor was a corner lot with air rights and development potential.
• Crown continued to work but refused to accept payment as we foresaw an unfavorable outcome.

Outcome:

• The neighbor responded with a year-to-year easement at an extremely inflated cost with no guarantee to renew.
• If the neighbor ever revoked the easement the restaurant would no longer be able to operate.
• With the lease already executed, ownership had a location they could not use to restore their restaurant.
• Crown has since reviewed a dozen leases for the client, and recently secured a location to reopen.
• Our client is currently subleasing the original space at a monthly loss.
• The former attorney has been replaced and there have been additional costs in ongoing litigation.