KEYWORDS: assignment lease tenant control sale stock, property, real estate
SUBMITTED BY:
Richard Santalesa,
Attorney, 07/28/2006
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DESCRIPTION:
An article surveying laws of the 50 states that answers the question
state-by-state of whether, in the absence of any controlling provision in a
lease on point, a sale of stock by a tenant that effectively transfers
control is considered an assignment of the lease?
[Addition by Eugene Volokh: To be an especially good calling card, the article should probably also analyze which approach is the best policy. It also need not go through all 50 states; though such comprehensiveness would be nice, it isn't strictly mandatory -- covering the most important states and the most important approaches would probably suffice.]
Constantly in corporate purchase situations.
RECOMMENDED READING:
39 A.L.R.4th 879, Merger or consolidation of corporate lessee as breach of
clause in lease prohibiting, conditioning, or restricting assignment or
sublease
Rubinstein Bros. v. Ole of 34th Street, Inc., 101 Misc.2d 563, 421 N.Y.S.2d
534 (Civ. Ct. New York Cty 1979)
Dennis' Natural Mini Meals, Inc. v. 91 Fifth Ave Corp., 568 N.Y.S.2d 740,
743 (1st Dep’t App. Div. 1991) (“a corporate tenant's transfer of all of
its stock to a third party does not constitute a breach of a nonassignment
provision of a lease.”)
Brentsun Realty Corp. v. D’Orso Supermarkets Inc., 582 N.Y.S. 2d 216 (2d
Dep’t App. Div. 1992) (holding that a merger of tenant subsidiary
corporation into its parent did not constitute an assignment).