Federal Judge Blocks Mamdani From Stopping Bankruptcy Sales

New York City Mayor Zohran Mamdani’s effort to halt the bankruptcy sale of more than 5,000 rent-subsidized apartments has been temporarily blocked by a federal bankruptcy court. Mamdani, who was sworn into office last week, directed the city’s Law Department to intervene in the bankruptcy proceedings involving more than 90 residential buildings owned by Pinnacle Group, a major city landlord.

City officials say Pinnacle owes approximately $12.7 million in unpaid housing code violation fines. The company filed for bankruptcy protection in May after defaulting on more than $560 million in debt, the Center Square reported.

U.S. Bankruptcy Judge David Jones declined the city’s request to intervene, allowing the bankruptcy sale process to move forward.

Pinnacle, owned by billionaire Joel Wiener, controls roughly 140 buildings and about 9,000 apartments across New York City, according to court filings. Following the bankruptcy filing, Summit Real Estate Holdings submitted a $450 million bid to purchase dozens of Pinnacle properties located in Brooklyn, Manhattan, the Bronx and Queens. The proposed sale requires court approval before it can be finalized.

“Completion of the bankruptcy auction process will bring financial stability along with the opportunity to stabilize services, outcomes which we would expect the City would not want to disrupt,” Pinnacle lawyer Ken Fisher noted in a recent statement about the coming sale, according to the outlet.

In court filings, the city’s lawyers expressed concerns about the financial aspects of the bankruptcy sale, indicating that Summit may lack the necessary resources to enhance conditions in the housing complexes it aims to acquire.

“Continuing losses and mounting expenses might lead to the need for additional bankruptcies or reorganizations, a state of financial and social chaos potentially worse than the current situation of the debtors themselves,” the city said.

The Union of Pinnacle Tenants, a collective formed to resist the sale of their buildings, claims that the current landlord has neglected maintenance, failed to settle utility bills, and allowed the apartments to fall into disrepair. They are concerned that the next owner will not make improvements to living conditions.

The struggle over the Pinnacle properties became a central issue in the recent mayoral race, with housing advocates highlighting how New York City’s skyrocketing rents and housing expenses are adversely affecting low-income residents, potentially leading to increased homelessness. New York is known for having some of the highest housing costs in the country.

Mamdani focused his campaign on safeguarding rent-subsidized apartments. On inauguration day, he visited one of Pinnacle’s properties in Brooklyn, where he engaged with tenants and criticized the poor living conditions in the buildings.

The recent court loss adds to the scrutiny surrounding Mamdani, particularly concerning his selection of Cea Weaver to head the Mayor’s Office to Protect Tenants. Weaver has drawn criticism for past social media comments in which she referred to homeownership as a “weapon of white supremacy.” Despite this backlash, Mamdani has stood by Weaver, who has expressed remorse for her earlier statements, which have since been taken down.

Last week, Mamdani claimed he told President Donald Trump directly that he opposed the U.S. military’s capture of Venezuelan President Nicolás Maduro.

Mamdani said he spoke with Trump by phone after being briefed on Maduro’s capture and his arrival in New York, where he is expected to face prosecution on narco-terrorism charges.

“I called the president and spoke with him directly to register my opposition to this act,” Mamdani said, “and to make clear that it was an opposition based on being opposed to a pursuit of regime change, to the violation of federal international law, and a desire to see that be consistent each and every day.”

Mamdani, speaking on his third day in office, was asked about the U.S. military strike in Venezuela during an unrelated news conference in the Greenpoint section of Brooklyn. Mamdani did not disclose how Trump responded to his objections during their phone call.