Federal Judge Blocks Mamdani From Halting Massive NYC Bankruptcy Sale
A federal bankruptcy judge has temporarily shut down New York City Mayor Zohran Mamdani’s attempt to derail the sale of more than 5,000 rent-subsidized apartments across the city, delivering an early setback to the newly sworn-in mayor’s sweeping housing agenda.
U.S. Bankruptcy Judge David Jones of the Southern District of New York ruled Friday that the city lacks standing to intervene in the bankruptcy sale of properties owned by Pinnacle Group, one of New York’s largest landlords. Pinnacle filed for bankruptcy in May after defaulting on roughly $560 million in loans. The Mamdani administration has claimed the company also owes the city $12.7 million in unpaid housing code fines.
Mamdani, who took office just last week, ordered the city’s Law Department to step in, arguing the transaction could worsen housing instability for thousands of tenants living in subsidized apartments. Judge Jones rejected that request, ruling the bankruptcy auction must proceed as planned.
Pinnacle, owned by billionaire real estate investor Joel Wiener, controls more than 140 buildings and approximately 9,000 housing units across all five boroughs. Court records show Summit Real Estate Holdings has submitted a $450 million bid to acquire roughly 90 of those properties.
“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 attorney Ken Fisher said in a statement.
City lawyers pushed back in court filings, warning that Summit may lack the financial capacity to rehabilitate aging buildings and improve conditions for tenants.
“Continuing losses and mounting expenses might lead to additional bankruptcies or reorganizations, a state of financial and social chaos potentially worse than the current situation,” the city argued.
Tenant groups opposed to the sale accuse Pinnacle of years of neglect and deteriorating conditions, while others fear new ownership could bring rent hikes or reduced oversight despite existing regulations.
The fight over Pinnacle’s portfolio became a major issue during the mayoral campaign, with Mamdani — a self-described Democratic Socialist — pledging to preserve rent-subsidized housing and aggressively challenge large landlords. On his inauguration day, he visited one of the Brooklyn properties to publicly condemn Pinnacle’s management.
Political Headwinds Grow
The court loss compounds political pressure on Mamdani as he defends his appointment of Cea Weaver to lead the Mayor’s Office to Protect Tenants. Weaver has drawn criticism for past statements describing homeownership as “a weapon of white supremacy.” She later walked back the remarks, calling them “poorly phrased and not reflective of my work.”
At the same time, Mamdani’s far-left political allies are under intensifying scrutiny. The Democratic Socialists of America (DSA), in which Mamdani is a prominent figure, has been linked to nationwide anti-Trump protests targeting Immigration and Customs Enforcement and the recent arrest of Venezuelan dictator Nicolás Maduro under President Donald J. Trump’s second-term administration.
Those protests — branded with the slogan “No Wars. No Kings. No ICE.” — have been organized by a coalition that includes the DSA, the Party for Socialism and Liberation, and the People’s Forum, a Marxist-aligned group reportedly funded in part by Chinese Communist Party-linked businessman Neville Singham.
On Thursday, the GOP-led House Oversight Committee voted to subpoena Singham for records related to his U.S.-based political organizing and financial networks.
According to a statement from the DSA’s New York chapter, “Trump invaded Venezuela, sacrificing lives for oil. Four days later, ICE forces invading Minneapolis murdered a legal observer recording their activity. Trump wants to be an emperor and a tyrant. Socialists must fight back.”
National DSA leaders have vowed to organize protests in more than 30 cities, accusing the Trump administration of pursuing “imperialist war abroad and fascist terror at home.”
As New York’s housing crisis collides with bankruptcy law, ideological governance, and federal scrutiny of far-left activism, the city’s new socialist mayor is facing resistance on multiple fronts — from Wall Street creditors in federal court to congressional investigators examining the political networks backing his rise.