This was originally published on the SGR Blog.
A Yellowstone proceeding (so-called after a Court of Appeals decision establishing the legal protocol) 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—and, if an adverse determination on the merits ensues, the tenant may cure the default and avoid a forfeiture.
The proceeding is New York–specific. Our Civil Courts in New York City and District Courts in the rest of the State (where landlord-tenant cases are litigated) do not have jurisdiction to grant equitable relief. So a tenant charged with default (who either controverts the default or needs more time to cure or both), must file a Yellowstone proceeding in Supreme Court (which has equitable jurisdiction) before the cure period ends to avoid termination of the lease. Supreme Court has the ability to toll the cure period and grant an extention of the time to cure (if the default is sustained).
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