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A bankruptcy court in Illinois has ruled that the force majeure provision in a restaurant lease excuses the tenant’s obligation to pay full rent during the time a stay-at-home order was implemented to slow the spread of COVID-19, the Wall Street Journal reported. The ruling appears to be the first of its kind after widespread closures triggered dozens of lawsuits across the country over missed rent payments. The legal concept was raised by tenants seeking rent relief after local health and government officials mandated the temporary closure of nonessential businesses and “on-premises” consumption of food and drinks. In Chicago, an Italian restaurant filed for bankruptcy protection in February and didn’t pay its rent from February to June. Its landlord, Kass Management Services Inc., sought to compel Giglio’s State Street Tavern to pay its rent from March to June or to vacate the premises unless rents are paid, according to filings at the U.S. Bankruptcy Court of the Northern District of Illinois. Bankruptcy Judge Donald R. Cassling ruled that the restaurant has to pay its March rent in full, but noted that the executive order by Illinois Governor J.B. Pritzker on March 16 suspending food consumption on-premises in restaurants, is grounds for force majeure for the other months. The order hindered the restaurant’s ability to perform by prohibiting on-premises consumption of food and drinks and restricted its business to takeout, curbside pickup and delivery, he added. These restrictions hurt the restaurant’s ability to generate revenue and pay rent. That said, the tenant “is not off the hook entirely,” said Judge Cassling. Given that the restaurant can still offer takeout, curbside pickup and delivery services, it should pay a reduced rent “in proportion to its reduced ability to generate revenue due to the executive order.”

Simon Property Group, the country’s largest mall owner, filed a lawsuit against Gap Inc. on Tuesday over unpaid rent and other charges it says amount to $66 million, the Wall Street Journal reported. In the filing, Simon Property said that the retailer has withheld rent for April, May and June. The landlord is seeking to be paid rent for those months, as well as attorney fees and other charges, according to the lawsuit. “The requirement that The Gap Entities timely pay rent due under the leases has not been excused,” said the complaint, which was filed in the Superior Court of the state of Delaware. Gap didn’t comment on the lawsuit directly, but said it is committed to working with landlords on “mutually agreeable solutions and fair rent terms.” “It’s important to note the profound effect that Covid has had on shopping centers as well, leaving them closed to us and our customers for months,” said Mark Daniel Snyder, communications manager at Gap. Gap said in April that its stores are closed because of the coronavirus pandemic and it had stopped paying rent because of insufficient cash flow. The San Francisco-based retailer, which owns brands such as Old Navy, Banana Republic and Athleta, added at that time that it was looking to renegotiate leases with its landlords.

The U.S. arm of the Belgian bakery chain Le Pain Quotidien won a bankruptcy judge’s approval to get out of leases for 59 restaurants shut down in the fallout from the coronavirus pandemic, Bloomberg News reported. Bankruptcy Judge John Dorsey acknowledged it was uncommon for a company in chapter 11 proceedings to seek immediate freedom from the leases at issue in the case. “The relief requested is unusual, but these are unusual times,” Dorsey said. The decision to seek protection from creditors under chapter 11 of the bankruptcy code allowed Le Pain Quotidien to shed debt and carry out a $3 million sale, pending court approval, to Aurify Brands LLC. That $3 million will serve as the chain’s bankruptcy financing.

Simon Property Group, the biggest U.S. mall operator, said yesterday that it would have about half of its over 200 retail properties in the country open within the next week, even as some of its major retail tenants struggle to say afloat, Reuters reported. The company was forced to temporarily close all its U.S. retail properties in March due to the COVID-19 pandemic, leading it to report over a 20 percent decline in quarterly profit and scrap its annual forecast. Simon did not disclose the percentage of total rent it had collected in April or May, key figures investors were looking for as major retail tenants cut or pause monthly rent payments to shore up cash reserves. Simon’s Chief Executive Officer David Simon declined to discuss details of negotiations the company is having with tenants over reductions in rent, but hinted at some of the tension in talks. “The bottom line is we do have a contract and we do expect to get paid,” he said. Simon also said it suspended or eliminated more than $1 billion of capital expenditure meant for redevelopment and new construction projects. The company said that it had already reopened 77 retail properties in regions where the lockdown restrictions had eased.