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Abernathy v. Adous

Arkansas Court of Appeals
85 Ark. App. 242 (2004)


In 1992, Abernathy (defendant) and Griffith Petroleum Inc. (GPI) entered into a commercial lease contract. The lease was for a ten-year term with six consecutive five-year options to renew. A portion of the rent was to be paid directly to Abernathy’s creditor Fidelity National Bank, and another portion directly to Abernathy. The lease provided that GPI’s insolvency or failure to pay would constitute a breach. Maref Quaran later executed a “Sublease Agreement” by which Quaran assumed all of GPI’s obligations under the lease—the same rent and lease period. Abdulazize Adous (plaintiff) later became a subtenant and eventual sole tenant under the sublease agreement. In 2001, Abernathy discovered that GPI had become insolvent and terminated the lease and demanded surrender of the premises. Adous, who had at all times remained current on the rent, first remitting payment to GPI and later into the court registry, sued Abernathy and GPI for specific performance. The trial court declared Adous an assignee of the original lease and that forfeiture of the premises would be inequitable.

Rule of Law


Holding and Reasoning (Baker, J.)

Dissent (Robbins, J.)

Dissent (Roaf, J.)

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