X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
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. 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 6th 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. DOUBLING UP Kenyon & Kenyon managing partner Robert Tobin said Thursday the yearlong 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. Stoffel could not be reached for comment. 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. Kenyon & Kenyon and another investor purchased One Broadway in 1996 for $6.5 million, according to public records. They subsequently sold it to Logany in 2000 for $34.8 million. Its current lease, which runs through 2011, prices the roughly 150,000-square-foot space in the mid-$20 range per square foot.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.