Yellowstone Injunction Awarded to Give Longer Cure Period

Facts: A tenant that operated a gym received a notice from the owner of its space ordering it to obtain the proper permits to operate its business, which were required by its lease. The tenant asked a New York trial court for a Yellowstone injunction, which would toll—that is, pause—the period to cure the alleged violations of the lease. The tenant claimed that it was still in the process of obtaining the necessary approvals and permits.

Decision: A New York trial court granted the Yellowstone injunction.

Reasoning: The court noted that the purpose of a notice to cure is to specifically apprise the tenant of claimed defaults in its obligations under the lease and of the forfeiture and termination of the lease if the claimed default isn’t cured within a set period of time.

A Yellowstone injunction maintains the status quo so that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture of the lease.

Here, the tenant was able to show that it is attempting to and has the ability to cure the alleged defaults, by diligently pursuing the permits necessary to operate under the lease; it simply needs more time to do so. 

• Pureform Movement, LLC v. 2374 Concourse Assoc., LLC, November 2016