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Scott Mollen

Contracts—Breach of Lease and Other Agreements, Including Personal Guarantees—Frustration of Purpose—Liquidated Damages

The defendants appealed from a trial court judgment in the plaintiffs’ favor on liability, with respect to claims for breach of an asset purchase agreement (APA), an administrative services agreement (ASA), a lease agreement, and guaranty agreements. The trial court granted the plaintiffs’ motion for summary judgment and denied the defendants’ motion for summary judgment. The dispute arose from a failed sale of an ambulatory surgical center (CSC).

A plaintiff operated CSC. CSC was a tenant of a building owned by “A,” an affiliated entity. CSC held a Certificate of Need (CON) from the NYS Dep’t of Health (DOH). In 2014, the family that owned CSC and “A” decided to sell the business and lease the building to a buyer who would operate the medical facility. CSC accepted a bid from “B” for $5 million. The parties negotiated four separate agreements: the APA, lease, ASA and personal guarantees of the lease.

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