Federal judge blocks Mayor Mamdani’s bid to halt sale of 5,100 rent-stabilized apartments
A federal bankruptcy judge denied New York City Mayor Zohran Mamdani’s request to delay the sale of roughly 5,100 Pinnacle rent-stabilized apartments, prompting city review.
Overview
Federal Bankruptcy Judge David Jones refused New York City Mayor Zohran Mamdani’s motion Thursday to intervene in the bankruptcy sale of about 90 Pinnacle-owned buildings containing roughly 5,100 apartments.
The Mamdani administration argued Pinnacle owes approximately $12.7 million in unpaid housing fines and that poor maintenance left units with code violations and tenant complaints.
Israeli firm Summit Properties USA placed a reported $450 million bid for the portfolio, raising tenant and city concerns about the buyer’s ability and intent to make repairs.
Judge Jones declined to pause the auction, leaving sale approval possible imminently; city lawyers say they will explore remaining legal options to protect tenants and ensure repairs.
The court loss arrives alongside scrutiny of Mamdani’s housing team pick Cea Weaver, whose past statements on homeownership have drawn criticism even as she pledges tenant protections.
Analysis
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FAQ
Judge David Jones rejected the Mamdani administration’s motion because the bankruptcy auction process was already underway with Summit Properties as the stalking‑horse bidder, and the court found no sufficient legal basis to pause or restructure the sale timeline solely to give the city more time to explore alternatives, allowing the auction to proceed toward a confirmation hearing.
The buyer is Summit Properties USA (also referred to as Summit Real Estate or Summit Gold), an Israel‑based real estate investment and management firm, which agreed to purchase roughly 5,100–5,200 mostly rent‑stabilized apartments for about $451–$451.3 million through a bankruptcy auction.
Tenants and city officials worry that Summit may lack either the financial capacity or the willingness to make extensive repairs on buildings that already have a high number of hazardous code violations, and that the low regulated rents might not generate enough income to support both needed renovations and debt service, potentially leaving units in continued disrepair.
Pinnacle placed its portfolio into Chapter 11 bankruptcy after mounting financial pressure from more than $560 million in mortgage debt, rising operating and financing costs, and state rent‑stabilization rules that sharply limited rent increases, which together eroded revenue and made the rent‑regulated properties financially distressed.
City officials say they will continue to participate in the bankruptcy proceedings where possible and use local enforcement tools—such as code enforcement, housing violations, and tenant‑protection programs—to push the new owner to correct unsafe conditions and comply with rent‑stabilization regulations even if they can no longer block the sale itself.
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