Gap sues landlord over missed rent payments during coronavirus

Five of Gap’s Inc.'s chains have countersued Brookfield Property Retail Inc. after being served a lawsuit in June for withholding rent.

According to the lawsuit, Gap's chain stores -- Gap, Athleta, Banana Republic, Old Navy, and Janie & Jack -- argued that "any obligation to pay rent beginning in March 2020" was nullified due to coronavirus-related restrictions that forced stores to close.

"These circumstances not only impose a severe and irreparable hardship on Tenants, they frustrated the express purpose of these leases and made their principal object illegal, impossible, and impracticable, all for a period of time that remains unknown and unknowable," the lawsuit states.

The lawsuit also argues that each of the five chains is entitled "to refund of rent and expenses paid in advance for March 2020", and "that the leases be modified and reformed, or rescinded, canceled, or terminated as a matter of law."

"We remain committed to working with our landlords on mutually agreeable solutions and fair rent terms, just as our industry and government partners have sat with us in good faith to shape the post COVID business landscape," a Gap spokesperson said in an emailed statement. "We are pleased with the progress we’ve made with hundreds of our landlords as we’ve reopened stores across the country, moving forward together towards growth."

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CORONAVIRUS MADE 40% OF MAJOR RETAILERS SKIP MAY RENT PAYMENTS

Gap's chain stores closed to the public on March 19 for "extended periods of time" in an effort "to protect the health and safety of their employees, customers, and the surrounding communities, and comply with applicable law," the suit stated.

Brookfield, the Gap's landlord, said that it intends to hold Gap accountable to its contracts.

It "should be clear from the filings that The Gap Inc. has taken inappropriate positions at a time when we should be working together," Lyndsey Kahn, the Brookfield spokeswoman, said in an email to FOX Business. "Brookfield has worked hard to reopen its shopping centers safely and consistent with guidance from local authorities, which is important for the many businesses and jobs that depend on commercial activity at our properties."

The suit also claims that Gap's stores were "required to make the difficult decision to furlough tens of thousands of store employees for closed stores across the country to preserve their finances while revenue from the stores dropped to zero overnight."

As a result, Gap claims that the purpose of the leases during this time "became impossible, illegal, and impracticable."

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The complaint comes after Gap was slapped with numerous lawsuits filed by multiple landlords after the retailer suspended rent payments for all its brands in April, according to the Real Deal.

Vestar, in May, became the first company to sue Gap, as it sought $100,000 for rent at two separate California malls, the outlet reported. In June, Gap was sued by Brookfield in Texas for $2 million for stores in the state. That same month, Gap was sued by Simon Property Group seeking $66 million in unpaid rent, the Real Deal reported.

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An earlier version of this story was updated to include statements from Gap and Brookfield.