Grill, Bank, and Bholan Secure Summary Judgment Based on Successor Liability

March 6, 2019

David M. Grill, Brian L. Bank, and Michelle A. Bholan secured summary judgment on behalf of their client, a landlord, against a former commercial tenant that breached a lease and against another entity owned by the tenant’s principals, based on a successor liability theory.

The commercial tenant, a Dunkin Donuts franchise, breached the lease when it unilaterally vacated the premises and ceased paying rent.  The tenant’s principals then formed a new entity that opened up a “new” Dunkin Donuts franchise half a block away from the premises.

The Rivkin team sued the tenant, the new entity and their principals. The team successfully argued that the new entity constituted a successor under the de facto merger doctrine and, thus, is liable for the obligations of the commercial tenant under the lease.

After performing an extensive analysis of the documentary evidence produced during discovery, and the oral testimony taken during discovery, the Court held that defendants did not raise any issues of fact refuting that plaintiff was able to satisfy all of the de facto merger factors with respect to the new entity and the commercial tenant.

Now that summary judgment has been granted as to liability, the case will proceed to trial for the purpose of determining the amount of damages due and owing to our client, which are estimated to be approximately $1 million when factoring in the rent owed, interest and the reimbursement of attorneys’ fees and costs incurred by our client in this action.

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