The Shakespeare Theatre Company won the latest round of litigation yesterday against a nonprofit group serving as its de facto landlord, with a District of Columbia Superior Court judge granting a preliminary injunction to the theater company.
The theater company sued Lansburgh Theater Inc. (LTI) in June, accusing the nonprofit of trying to push the company out of a theater space in downtown Washington by raising the rent. Following two days of testimony this week, Judge John Ramsey Johnson entered an order allowing the theater company to continue using the theater, at least for the time being.
"We're happy with the victory," said Randall Miller of Arnold & Porter, lead counsel for the theater company. "The court's order acknowledges that this is not a commercial relationship between the Shakespeare Theatre Company and LTI. It’s a…charitable relationship in which LTI is obligated to act on STC's behalf."
Lansburgh, in a statement, noted that the order did not require the removal of two of its board members named as individual defendants; the theater company asked for their removal in its complaint, a request Lansburgh today called an "attempted hostile takeover" of the board.
"LTI had already agreed approximately three months ago to the injunction that the Court entered, and LTI and its Directors are pleased that the Court rejected STC's attempted hostile takeover," the nonprofit said, also reiterating its claim that the theater company was pursuing the lawsuit in an attempt to avoid paying its share of the building's upkeep.
Lansburgh and its board members are being represented by Patrick Conner of Morgan, Lewis & Bockius. Laura Steinberg of Sullivan & Worcester in Boston, lead attorney for building developer Graham Gund, also a defendant, declined to comment.
Lansburgh was created in 1992 as a nonprofit with the sole purpose of maintaining the historic Lansburgh Theatre and supporting a designated charitable organization, in this case the theater company. Lansburgh used a $1 million donation, paid out in 14 annual installments, to fund upkeep, but had asked the theater company to pay more in rent in recent years when those payments stopped coming.
The relationship fell apart during the latest round of lease renewal talks. Lansburgh, according to the lawsuit, wanted to raise the theater company's rent from $70,000 to $480,000, an amount that the theater company said would threaten its ability to operate. The company operates in two buildings downtown – the Lansburgh Theater and Sidney Harman Hall.
The theater company also accused Gund of improperly interfering with the theater's operations and working with Lansburgh's officers to push them out. In previous filings and during a hearing earlier this month, Miller told Johnson about his client's suspicions that Gund wanted the theater company out to make way for potentially more lucrative uses for the space – a claim Conner has denied.
The preliminary injunction bars Lansburgh from evicting the theater company and ending the theater company's status as Lansburgh's "supported" organization, and prohibits Gund from directly or indirectly exercising control over Lansburgh's actions, among other things.
In a statement, theater company managing director Chris Jennings said that the ruling is "a victory for not only the Shakespeare Theatre Company, but for our patrons, supporters, and the people of Washington, D.C. who have shown their unwavering support during this time."
A status hearing before Johnson is scheduled for January 10.