Patrick Breen

Allen, Matkins, Leck, Gamble & Mallory

Specialty: Real estate

Law School: UC Berkeley, 1978

Commercial property owners scored a huge victory a couple of years ago, thanks to attorney Patrick Breen. Because of his lawyering, tenants cannot get out of their leases just because a building goes into foreclosure.

The issue came to the forefront in the early ’90s when the recession spurred a rash of foreclosures and depressed commercial rents. Tenants were shedding their pre-existing leases and cutting new, lower-cost leases.

“Some sophisticated tenants said, ‘My lease has been foreclosed out. I don’t have any obligation to pay rent and I’m a month-to-month tenant.’ The difference was in the millions of dollars,” said Breen. “The effect of what tenants were trying to do would have had far-reaching consequences for lenders.”

It also had consequences for property investors. Lenders base their commercial mortgage decisions on the cash flow from the property’s leases. So if a property fell on hard times and there was a chance the leases could be declared null and void, lenders would be less keen on making such loans.

The case he won, which concerned an Encino office building that a lender had taken back through foreclosure, resulted in those leases being declared intact. Under the ruling affirmed by the Court of Appeals, tenants in a foreclosed building must agree to accept a new owner and lease on the same terms and conditions as the original lease.

Breen has been a partner at Allen, Matkins, Leck, Gamble & Mallory since 1984 and is chair of the firm’s environmental litigation department. Several big-name developers are among his clients, including Pac Ten Partners, Trammell Crow and Catellus Development Corp.

Breen went to bat for Koll Co. in fighting a claim that electromagnetic fields caused cancer in tenants of a building the company owned. He represented TrizecHahn Corp. in its Hollywood redevelopment project and Universal Studios Inc. in numerous actions concerning its Universal City development.

Breen loves being in the courtroom, which is a good thing considering he routinely tries several cases a year. He also likes the competition. “It’s the time at which you can prove your worth to your client and you’re willing to take the case to its ultimate resolution,” he said.

Elizabeth Hayes