Gap sued over unpaid rent

Gap Inc. can now join Ross Stores Inc. on the list of companies being taken to court over unpaid rent. A Manhattan landlord, 48th Americas LLC, has sued Gap for its failure to pay hundreds of thousands of dollars in rent, specifically a total of 530,000 dollars for a leased space at 1212 Sixth Avenue.

Gap has now breached the terms of its lease extension from 2015, and 48th Americas is seeking the 530,000 dollar payment in addition to 20,000 in legal fees. The 530,000 dollars also includes water charges and snow removal fees that Gap failed to pay.

Gap's original lease on the property dates back to 1991 and the current terms of the lease specify a lease payment amount of 264,200 dollars in fixed rent per month as well as water charges and snow removal fees. The lease also says that if 48th Americas has to take Gap to court over unpaid rent they are obligated to pay for the legal fees.

With New York still on lockdown due to coronavirus, Gap's 1212 Sixth Avenue location is without revenue, hence they haven't paid rent in two months. Gap appears to at least be in a stable enough financial position that they won't have to resort to bankruptcy, as they have still been operating e-commerce and they are now set to open 800 stores with many states and cities beginning to ease and lift coronavirus lockdown restrictions. Courts in certain jurisdictions have cases under review to determine whether coronavirus should be included as a trigger event to force majeure clauses.

photo: courtesy of Gap Inc.