February 4, 2020
Javier Lopez has been named an honoree in the category of “On The Rise” for the 2020 Professional Excellence Awards by DBR.
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Florida restaurants, El Novillo Restaurant Group proposed a class action focusing on entities suffering COVID-19 related losses in the non-essential hospitality sector. Lawyer for El Novillo, Benjamin Widlanski of Kozyak Tropin & Throckmorton LLP, told Law360 on Friday that he hopes to convince the court that the insurance industry has embarked on a “disinformation campaign” designed to convince the public that the United States’ virus-related business interruption is not a covered event.
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With tourism at a standstill and nonessential businesses closed, local commercial tenants are looking for rent breaks as the coronavirus crisis heads into April.
They’re finding mixed results.
Among those retailers are Nick Sharp, co-owner of Threefold Cafe, with six locations, and Ricky Patel, president of The Spot Classic Barbershop, with 15 locations. Some landlords immediately agreed to some form of rent relief, they said, while others declined to negotiate.
But as the weeks move on, many attorneys and landlords are advising abatements.
Jason Kellogg, partner at the downtown Miami-based law firm Levine, Kellogg, Lehman, Schneider and Grossman, is advising clients including shopping center owners to renegotiate leases for the next two months.
“Everyone is going to feel pain right now,” Kellogg said. “It’s a matter of alleviating that pain.
“You can’t get blood from a stone,” he said.
But most landlords will want to see restaurant and retail owners make an effort before agreeing to rent changes, said Javier Lopez, managing partner of the Coral Gables-based law firm Kozyak Tropin & Throckmorton. “Businesses have the responsibility to take proactive steps to meet contractual obligations.”
That may include laying off employees to preserve the cash flow needed to pay rent, Lopez said.
Legally, landlords can demand tenants pay rent, Kellogg said.
The exception would be tenants with force majeure lease clauses that protect tenants who cannot fulfill their obligations due to an unforeseen event such as an earthquake, hurricane or tornado — or pandemic.
Tenants may also argue frustration of purpose, arguing that an unforeseen event undermined their intent for having entered into an agreement with their landlord, Lopez said.
But whether COVID-19 is legally considered a natural disaster, and whether it was an unforeseen event, may be disputed by some landlords and insurers, Lopez said — and may ultimately end up in litigation.
For now, lease practices vary by the property owner and by tenant. Some landlords are offering rent relief, no questions asked. Others are dealing with tenants on a case-by-case basis. Yet others are declining to offer any relief — at least for now.
Tricera Capital, a Brickell-based commercial real estate property owner and management firm, wrote an email two weeks ago informing all of its 30 tenants that it would defer rent payments for April and allow them to make up the amount owed over the following six months, said co-founders Ben Mandell and Scott Sherman.
“We are playing the long game,” Mandell said. “Tenants are the lifeblood of our assets.”
The company is well capitalized, Sherman said, and took 50% to 60% financing for each of their commercial spaces. “Other property owners may need 75% financing,” Sherman said. “You may pay less up front but you have less breathing room.”
The luxury-oriented Bal Harbour Shops are looking at hardships on a case-by-case basis, said Matthew Whitman Lazenby, president and chief executive officer of Whitman Family Development, which owns and manages the shops. “Our tenants know we stand with them through this and we are currently in discussions with our tenants to determine the best strategy for each moving forward,” he wrote via email.
Regardless of the landlord, tenants with a history of late payments may well be at a loss, said Lopez, of Kozyak Tropin & Throckmorton.
“I’ve seen some tenants that were hanging on by the skin of their teeth. They had already spoken about rent abatement and being short on rent since November. This may be the nail in the coffin but the coffin was already built. The landlord, in that case, would likely have a winning argument.”
Some landlords are refusing any relief.
Threefold’s Sharp said he reached out a month ago to his six landlords. Four said “’don’t worry about it,’” Sharp said. He is talking with them about lease extensions. Another landlord has yet to give a definite answer, wanting to first explore options.
But one, Sharp said, “gave a hard ‘no.’”
“We never missed a rent payment,” Sharp said. “We wrote back saying vacancies are going to be everywhere and your best option would be to work with us.”
In the interim, his cafes have become grocery stores.
The Spot Barbershops closed its 15 South Florida locations more than two weeks ago, Patel said, to ensure safety.
His landlords have given mixed responses. Three told him they would work with him, proposing a lease extension of 60 days and suggesting they take “one month at a time,” he said.
But the majority, 12 landlords, told Patel he has to pay rent.
“It felt like a knife to the heart because we always pay on time,” Patel said.
He is considering federal loans and incentives to pay bills, including insurance and utilities.
And he’s looking for ways to help his barbers, who live off commission. His barbers average $60,000 per year, or $5,000 per month. For now, they’re earning nothing.
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A Miami-Dade Circuit judge has vacated a sanctions order against Bilzin Sumberg Baena Price & Axelrod LLP and partner Jose M. Ferrer. Bilzin Sumberg and Ferrer are represented by Harley Tropin of Kozyak Tropin & Throckmorton and Raoul Cantero of White & Case LLP.
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The Helms-Burton Litigation Explosion: A Federal Cause of Action Takes Effect
Numerous cases have been filed in recent months against companies that have done business in Cuba for allegedly utilizing property expropriated by the Cuban government during and after the Cuban Revolution. These claims – most of which have been initiated in the United States District Court for the Southern District of the Florida – have been made possible because President Trump declined to suspend the Article III cause of action as past presidents had done. This panel, which features lawyers who are litigating these cases, will provide an overview of this litigation, which promises to be in headlines for the foreseeable future.
Moderator: Pedro Freyre, Akerman, Miami, Florida
Speakers: Javier Lopez, Kozyak Tropin & Throckmorton, Coral Gables, Florida Evan Ezray, Boies Schiller, Fort Lauderdale, Florida France Tenaille, Gowling WLG, Toronto, Canada Jenny Torres, Akerman LLP, Miami, Florida
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Judge Raymond B. Ray retires after 27 years as a bankruptcy judge for the United States Bankruptcy Court for the Southern District of Florida.
KTT attorneys were at the forefront of this year’s Miami Law Class Action and Complex Litigation Forum Last month, the fourth annual Miami Law Class Action and Complex Litigation Forum brought together some of the country’s most distinguished judges, attorneys, and academics to discuss current topics and issues associated with multi-district litigation and class actions. The all-day event was divided into four panels: major takeaways from “New Waves of Mega Liability Litigation”, the pros and cons of multi-district litigation, ethics issues in large-scale litigation, and hot topics in class actions and MDLs. Leading the first panel, KTT’s founding partner, Harley S. Tropin, kicked off the forum with lessons learned in opioid cases, the $400 million Jay Peak Ponzi scheme, and other recent litigation. Our very own Benjamin J. Widlanski shared his insights during panel three on “Ethics in Private Investigations: Doing it Right.” From the Southern District of Florida, key speakers also included the Honorable Roy Altman, the Honorable Darrin P. Gayles, and the Honorable Robin L. Rosenberg, as well as Eleventh Judicial Circuit Judge William Thomas.
“Miami is at the epicenter of many significant class action lawsuits. It is critical that Miami Law holds this conference to address the important and novel issues that regularly affect the cases in our district.”
-Harley S. Tropin
February 4, 2020
Javier Lopez takes on management duties as the youngest managing partner at KTT.
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