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138 N.Y. Realty v. Conroy

Guarantors' Liability of Corporate Debt Not Affected by Company's Filing for Bankruptcy

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  Plaintiff moves, pursuant to CPLR 3212, to dismiss defendants’ affirmative defenses and for summary judgment for past due rent and for a hearing on attorneys’ fees. Defendants have cross-moved for summary judgment dismissing plaintiff’s complaint, based upon the bankruptcy of the tenant. Underlying Allegations and Procedural Background Plaintiff alleges that it is the owner of a building (the Building), located at 138 Fifth Avenue, New York, New York and that Its Bashert LLC d/b/a Senses New York Salon & Spa (Senses) occupied the second floor of the Building (the Premises) pursuant to a lease dated March 25, 2016 (the Lease) (Pae affidavit,

4-5). It states that, as part of the consideration for execution of the Lease, Bruce E. Conroy (Conroy) and Ronald M. Rudolph (Rudolph) executed identical personal guarantees (the Guarantees) that “unconditionally guarantee[d] to [plaintiff]…the full and faithful payment and performance and observance of all obligations…including…the prompt and punctual payment of all Base Annual Rent, Additional Rent and other sums payable under the Lease and reasonable costs of collection and enforcement (including legal fees and disbursements)” (id., 6; Guarantees, 2 [a]). The Guarantees also provided that “[t]he viability and enforceability of this Guaranty and the obligations of the Guarantor hereunder shall not terminate and shall not be affected or impaired by…the commencement of any bankruptcy or insolvency action or proceeding or the grant of relief thereunder [against Sense]” (id., 5). The Lease contained a provision in Article Twenty for attorneys’ fees. Plaintiff contends that Senses defaulted on its rent and that pursuant to an arrears agreement (the Arrears Agreement), the rental arrears were reduced from $83,024.01 to $70,905.03, but that Senses breached the Arrears Agreement by defaulting on its payment obligations and that, on December 12, 2016, Senses filed for bankruptcy (Pae affidavit,

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