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Note 6 - Commitments and Contingencies
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6 Months Ended |
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Jul. 02, 2011
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| Commitments and Contingencies Disclosure [Text Block] |
Note
6 - Commitments and Contingencies
In
July 2007, the Company entered into a lease (the “New
York Lease”) for corporate office space located at 114
West 41st
Street, New York, NY 10036 (the “New York
Office”). As part of the New York Lease, the landlord
agreed to commence and substantially complete major capital
improvements to the common areas of the New York Office by
June 2008. After June 2008, if the landlord has not made such
progress on the capital improvements, the New York Lease
provides, among other things, for a reduction in rent by one
half, until substantial completion of the capital
improvements.
On
February 16, 2011, the Company filed a complaint in the
Supreme Court, New York County, with respect to the New York
Lease. The Company asserted claims against the landlord
of the New York Office; (i) for a judgment declaring (a) that
the Company is not in default under the New York Lease and
(b) that the rent previously paid by the Company represents
the full amount of rent; and (ii) for rescission of the New
York Lease as of June 30, 2008 by reason of default by the
Landlord with respect to a material provision under the New
York Lease requiring prompt completion of major capital
improvements of the New York Office’s common
areas.
On
February 23, 2011, the receiver of the New York Office
commenced a non-payment proceeding in the Civil Court of the
City of New York against the Company. The receiver
seeks payment of allegedly past due and unpaid rent and
additional rent under the New York Lease. The Company
vigorously denies that any rent or additional rent is due and
owing under the New York Lease and has moved for an order
removing this action to the Supreme Court, New York County,
and consolidating it with the previously commenced action
described above. The motion for removal and
consolidation was denied by the Supreme Court and the matter
has been proceeding in Civil Court. The Company has filed its
answer, affirmative defenses and counterclaims and has moved
for discovery in that action by
Notice of Motion dated June 16, 2011. The motion and
subsequent cross-motion by Petitioner were argued before the
court on July 18, 2011. No decision has been rendered as of
the date hereof.
The
Company is from time to time involved in other litigation
incidental to the conduct of its business, none of which is
expected to be material to its business, financial condition,
or operations.
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