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Claims By Tenant Of Loew's Paradise Theater Dismissed On Appeal

New York, NY, October 11, 2012: Claims By Tenant of Loew's Paradise Theater Dismissed On Appeal.

The firm has successfully appealed and won an important appellate ruling in Dabriel Inc. v. The First Paradise Theaters Corp. dismissing as a matter of law claims by the tenant of the world-famous Loew's Paradise Theater, and the tenant's principal, seeking to avoid liability on promissory notes and guarantees executed as consideration for the lease. The recently refurbished Theater is considered "the jewel of the Bronx" and is the site of major events such as the BET "Black Girls Rock" Award Show. The decision is reported at 99 A.D.3d 517, 952 N.Y.S.2d 506.

The litigation arose out of claims by the corporate tenant (theater operator) and guarantor seeking to reform the lease and set aside the notes and guarantees. The Supreme Court, Bronx County, denied the firm's motion to dismiss the complaint on the grounds that it was barred by documentary evidence and failed to state a cause of action. On appeal the First Department reversed the lower court ruling and upheld the firm's arguments, striking all of the causes of action seeking to avoid liability on the debt.

The Appellate Division decision is expected to be an important pro-landlord precedent in dealing with debtors and guarantors seeking to avoid liability on collateral instruments executed in conjunction with primary transactions such as real estate and business acquisitions, leasing, and borrowing transactions.

The firm is pursuing the landlord's counterclaims against the tenant and its principal based on the notes and guarantees.