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NEW YORK � Intellectual property boutique Kenyon & Kenyon has prevailed in a bizarre court battle over its landlord’s attempt to insert a “potentially hostile” tenant into the middle of the firm’s downtown office space. A longtime tenant and former co-owner of One Broadway, Kenyon & Kenyon now occupies almost all of the space in the landmark 12-story building, constructed in 1884 and known as the International Mercantile Marine Building. The firm has been seeking to exercise an option on the remaining space, half of the sixth floor. But the firm’s landlord, Logany LLC, has balked at entering into a lease for the additional space, claiming it has the right to “carve out” a space in the middle of the sixth floor for its parent company, Stoffel & Partners. Swiss lawyer and foundation head Marco Stoffel, who is trustee for the building’s European owners, is also the president of Logany. Manhattan Supreme Court Justice Louis York ruled Wednesday that Kenyon & Kenyon’s sixth-floor option agreement, which gives the firm the right of first refusal, clearly precluded the creation of such a carved-out space. In Kenyon & Kenyon v. Logany, 600949, the judge ordered the landlord to enter into a lease with the firm covering the entire remaining sixth-floor space. Moreover, Justice York said he agreed with the firm’s contention that the “so-called carve-out space in the middle of the sixth floor is a red herring.” Stoffel has plans to enlarge an existing rooftop structure and has received permission from the New York City Landmarks Preservation Commission to do so after a public hearing in August 2002. But Kenyon & Kenyon has refused to temporarily vacate the top floor to allow the work to proceed. Justice York said he believed the idea of the sixth-floor carve-out was “created out of whole cloth in a desperate attempt to obtain leverage over the defendants as this would seriously impair the plaintiff’s use of the space by separating Kenyon’s personnel from each other by an unrelated and potentially hostile group in the middle of its sith floor space.” The judge continued: “The intention, the Court submits, is to induce the plaintiff to moderate its refusal to vacate the 12th floor, thereby enabling Logany to use that area to build a penthouse on the roof.” The judge also rejected Logany’s contention that its parent company was not a third party to which Kenyon & Kenyon’s right of first refusal applied. “These two companies cannot pierce the corporate veil for their own benefit,” he wrote. “Their separate existences are primarily for the purpose of shielding them from liability. They cannot, therefore, shed such a distinction for their convenience.” The judge noted that the firm had relied on expanding the sixth floor, commissioning a redesign of the space and making hiring decisions based on its availability. Kenyon & Kenyon Managing Partner Robert Tobin said Thursday the year-long dispute had forced some lawyers to double up in offices and a meeting area intended for client presentations has been occupied instead by legal assistants working on document review. He said the sixth-floor carve-out would have been a ridiculous space, lacking any independent ingress or egress. “It would have been like Kashmir between India and Pakistan,” he said. Tobin said the firm declined to accommodate Stoffel’s plan for the rooftop because it would have made the building into a noisy construction area, possibly disrupting the firm’s practice for a year or so. He said Stoffel initially only offered to cover the firm’s out-of-pocket expenses relating to the dislocation. Janice Mac Avoy, a Fried, Frank, Harris, Shriver & Jacobson partner who has been representing Kenyon & Kenyon in the dispute, said Stoffel originally wanted to put a three-unit penthouse on top of the building though it was unclear if the landmarks commission’s permit would cover more than a modest expansion. Though onerous real estate obligations have driven some New York IP boutiques, notably Pennie & Edmonds, to seek combinations with larger, general-practice firms, Kenyon & Kenyon’s real estate situation appears to have strongly benefited the firm. Anthony Lin is a reporter with the New York Law Journal, a Recorder affiliate.

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