Tenant Can’t File for Injunction After Cure Period

Facts: An owner sent a notice of default to its tenant and referred to the lease provision containing a 20-day cure period. The provision also provided for termination or cancellation of the lease on five days’ notice if the tenant failed to cure. The tenant filed a motion for a Yellowstone injunction, a court order that allows the tenant to prevent the owner from terminating the tenant’s commercial lease while the parties litigate the point in dispute. The owner argued that the tenant should be denied the injunction because the tenant failed to request the court order during the cure period.

Decision: The New York Supreme Court denied the tenant’s request.

Reasoning: The court said that because the tenant failed to apply for the Yellowstone injunction within the 20-day cure period, which the tenant could have ascertained merely by referring to a specific lease provision, the tenant lost the right to ask for it later.

• Metal Tek Products Inc. v. M&S Properties LP, June 2007

Editor’s Note: A Yellowstone injunction can be a powerful tool when it’s used correctly and filed in a timely manner. The injunction extends the cure period under the lease while the parties litigate their dispute.