On March 20, 2026, Justice Boddie of the Kings County Commercial Division issued a decision in Kings Auto. Holdings, LLC v. Brooklyn Store LLC, 2026 NY Slip Op. 31078(U), holding that for the purposes of a Yellowstone injunction, an unauthorized transfer of ownership is a curable defect, explaining:
A Yellowstone injunction maintains the status quo so that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture of the lease. To obtain a Yellowstone injunction, the tenant must demonstrate that (1) it holds a commercial lease, (2) it received from the landlord either a notice of default, a notice to cure, or a threat of termination of the lease, (3) it requested injunctive relief prior to both the termination of the lease and the expiration of the cure period set forth in the lease and the landlord’s notice to cure, and (4) it is prepared and maintains the ability to cure the alleged default by any means short of vacating the premises.
Here, it is undisputed that plaintiffs hold a commercial lease, received a notice of default threatening termination, and commenced this action prior to the termination date. Plaintiffs also expressly state their willingness and ability to cure any defaults should the Court determine that any exist.
In support of its argument that the alleged defaults are incurable as a matter of law, defendant relies solely on two non-binding First Department decisions: Artcorp Inc. v. Cilirich Realty Corp., 168 AD3d 515 [1st Dept 2019], and Macklowe v 42nd Street Dev. Corp., 170 AD2d 388 [1st Dept 1991], neither of which supports such proposition. To the contrary. Artcorp expressly recognizes that even where a tenant has effected an unauthorized transfer of ownership interests. a default may still be cured, since it is not necessary, in order to cure, that a tenant show that it is able to erase the past, as long as it can show that it is able to bring itself into compliance with the lease without vacating the premises; including by seeking consent from the landlord, which could be obtained post-assignment. As to Macklowe, which does not arise in the Yellowstone context, the First Department merely holds that a breach of a covenant against assignment may give rise to actual damages based on the written agreement, and does not address, let alone foreclose, the availability of a cure or injunctive relief in this context.
(Internal quotations and citations omitted).