Federal Judge Blocks Mamdani From Stopping Bankruptcy Sales
New York City’s newly sworn-in mayor, Zohran Mamdani, suffered an early setback after a federal bankruptcy judge blocked his attempt to interfere with the court-ordered sale of thousands of rent-subsidized apartments tied up in a major bankruptcy case.
Mamdani, who took office just last week, directed the city’s Law Department to step into bankruptcy proceedings involving more than 90 residential buildings owned by Pinnacle Group, one of New York City’s largest private landlords. The properties collectively include more than 5,000 rent-subsidized apartments spread across the city.
City officials argue Pinnacle owes roughly $12.7 million in unpaid housing code violation fines. The landlord sought bankruptcy protection in May after defaulting on more than $560 million in debt, according to a report from the Center Square.
However, U.S. Bankruptcy Judge David Jones declined the city’s request to intervene, allowing the bankruptcy auction process to continue without municipal involvement.
Pinnacle, owned by billionaire real estate developer Joel Wiener, controls approximately 140 buildings and nearly 9,000 apartments citywide, court records show. After the bankruptcy filing, Summit Real Estate Holdings submitted a $450 million bid to acquire dozens of Pinnacle-owned properties across Brooklyn, Manhattan, the Bronx, and Queens. Any sale must still receive final court approval.
“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 regarding the pending sale, according to the outlet.
City attorneys pushed back in court filings, warning that Summit’s finances could be insufficient to address deteriorating conditions across the housing portfolio.
“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 argued.
Tenant activists remain wary. The Union of Pinnacle Tenants—formed in opposition to the sale—claims the current landlord has failed to perform basic maintenance, neglected utility payments, and allowed buildings to deteriorate. Members fear a new owner could continue the same pattern of mismanagement.
Housing policy played a prominent role in the recent mayoral election, as progressive activists highlighted New York City’s soaring rents and rising housing costs—among the highest in the nation—as a driver of homelessness and economic instability for low-income residents.
Mamdani made preservation of rent-subsidized housing a cornerstone of his campaign. On his first day in office, he toured a Pinnacle-owned building in Brooklyn, meeting with tenants and publicly condemning what he described as unacceptable living conditions.
The court ruling adds to mounting scrutiny surrounding the new mayor, including controversy over his appointment of Cea Weaver to lead the Mayor’s Office to Protect Tenants. Weaver previously faced backlash over social media posts in which she described homeownership as a “weapon of white supremacy.” Although Weaver later apologized and deleted the posts, Mamdani has continued to defend her appointment.
The mayor has also drawn national attention for foreign policy comments well outside the traditional scope of city government. Last week, Mamdani said he personally contacted President Donald J. Trump to object to the U.S. military’s capture of Venezuelan strongman Nicolás Maduro.
Mamdani said the call came after he was briefed on Maduro’s capture and subsequent transfer to New York, where the former Venezuelan leader 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.”
Speaking on his third day in office during an unrelated press conference in Brooklyn’s Greenpoint neighborhood, Mamdani declined to say how President Trump responded to his objections.