Kramer Levin Secures Settlement for Low Income Tenants, Ending Years Long Litigation With Landlord

On Feb. 5, 2024, a Kramer Levin team secured a settlement for nine low income tenants with their bankrupt landlord, ending the years long litigation between the tenants and the landlord. The tenants had initiated litigation against the landlord with the assistance of Legal Aid in New York City Civil Court for abatement of and damages for hazardous, unsafe, and unhygienic conditions in the building, as well as harassment claims. Before the trial was scheduled to begin, the landlord filed for bankruptcy in the Bankruptcy Court for the Southern District of New York, thereby staying the tenant’s litigation.
 
The tenants each filed a proof of claim against the landlord in the bankruptcy case on account of their litigation and continuing building hazards. The landlord successfully objected to those claims, thereby leaving the tenants with no recourse against the landlord. After the Kramer Levin team was retained as pro bono bankruptcy counsel, the tenants filed a motion for reconsideration of their claims citing service and notice defects by the landlord with respect to the tenants, and initiated settlement discussions with the landlord. As a result of those negotiations, the settlement contained provisions in favor of the tenants forgiving tens of thousands of dollars of outstanding rent, secured go-forward lease agreements with rent amounts in accordance with applicable law, provided the tenants with thousands of dollars in future cash or rent credits, and ensured the landlord completed all outstanding repairs.