DECISION ORDER
ORDERED that the order is modified by reducing the amount of the undertaking from the sum of $200,000 to the sum of $108,000; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.
The fixing of the amount of an undertaking is a matter within the sound discretion of the court, and will not be disturbed absent an improvident exercise of discretion (see Blueberries Gourmet v. Aris Realty Corp., 255 A.D.2d 348, 350; Clover St. Assocs. v. Nilsson, 244 A.D.2d 312, 313). However, the amount of the undertaking must be rationally related to the amount of the defendant's potential liability if the preliminary injunction later proves to be unwarranted (see Blueberries Gourmet v. Aris Realty Corp., supra at 350; Clover St. Assocs. v. Nilsson, supra at 313), and not based upon speculation (see 7th Sense v. Liu, 220 A.D.2d 215; Visual Equities v. Sotheby's, Inc., 199 A.D.2d 59). The amount of the undertaking will be reduced where the amount fixed is found to be excessive (see G.P.K. Rest. Enters. v. Paravalos, 253 A.D.2d 450; Zonghetti v. Jeromack, 150 A.D.2d 561).
Here, the Supreme Court improvidently exercised its discretion in fixing the amount of the undertaking at $200,000, as that sum was based upon speculation and not rationally related to the amount of the defendants' potential damages if the preliminary injunction later proves to be unwarranted. Accordingly, the proper amount of the undertaking should be $108,000, which represents the three-year rental value of the premises at the average cost of $3,000 per month.
FLORIO, J.P., FRIEDMANN, COZIER and MASTRO, JJ., concur.