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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies In addition to the commitments and contingencies disclosed elsewhere and previously disclosed, the Company has the following commitments and contingencies. The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries. The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion, but no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement. From time to time, the Company is, directly and indirectly, involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations, except for the following: Cummins Inc. v. Lexington Columbus (Jackson Street) L.P. and Wells Fargo Trust Company, N.A. (State of Indiana, County of Bartholomew, in the Bartholomew Superior Court). On October 25, 2018, Cummins Inc., the tenant in the Columbus, Indiana office building, filed a complaint for declaratory relief against Lexington Columbus (Jackson Street) L.P. (“Lex Columbus”), the Company's property owner subsidiary, and Wells Fargo Trust Company, N.A., the trustee for the noteholders with a security interest in the office building. Despite failing to timely provide notice of intent to exercise a purchase option for the office building that was expressly due by July 15, 2018, where time was of the essence, Cummins Inc. has asked the court for a declaration that it is entitled to purchase the building at the option price and to terminate the lease effective July 31, 2019. Cummins Inc. does not dispute that it failed to comply with the requirements of the purchase option, but alleges that it is entitled to relief under several equitable theories. Under the subject lease, the failure of Cummins Inc. to exercise its purchase option and to give notice of non-renewal, Cummins Inc.’s tenancy extends through July 31, 2024, with options to further extend for additional time periods. Lex Columbus filed a motion to dismiss the complaint on January 8, 2019, which was denied on May 24, 2019. On July 22, 2019, Cummins Inc. filed a motion to authorize depositing of disputed funds into a special court administered account with respect to the rent due under the lease on and after August 1, 2019, which Lex Columbus opposed. On July 31, 2019, the Court granted the motion by Cummins Inc. to deposit future rent due under the lease into a Court administered account. On July 31, 2019, Cummins Inc. filed a motion to authorize depositing of the option purchase price into a special court administered account, which the Court has not taken action on. Lex Columbus filed an answer, affirmative and other defenses and a counterclaim for damages and declaratory relief on August 7, 2019. Lex Columbus filed a jury demand on August 19, 2019. On August 15, 2019, Lex Columbus filed, with the Indiana Court of Appeals, a notice of appeal of the order permitting Cummins Inc. to deposit future rent into a Court administered account. On August 19, 2019, Lex Columbus filed a motion for automatic change of judge. On August 28, 2019, the Court granted the motion. On September 12, 2019, the Court ordered the appointment of a special judge. On August 27, 2019, Cummins Inc. filed its answer Lex Columbus’s counterclaim, and filed an amended answer on August 28, 2019. On September 5, 2019, the parties entered into a stipulation dismissing Wells Fargo Trust Company, N.A. from the action. On October 31, 2019, Lex Columbus filed with the Indiana Court of Appeals its appellant’s brief with respect to the Court’s order authorizing Cummins to deposit future rents under the lease into a Court administered account. As of September 30, 2019, the rent payments held in escrow were $1,231. Discovery is ongoing. The Company believes that Indiana law supports Lex Columbus's right to enforce strict compliance with the terms of the option to purchase under the lease and retain ownership of the building and the Company intends to vigorously defend this claim.

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