A federal judge has temporarily blocked Mayor Zohran Mamdani’s attempt to stop the bankruptcy sale of more than 5,000 rent-subsidized apartments across New York City, dealing an early blow to the newly sworn-in mayor’s housing reform agenda.
U.S. Bankruptcy Judge David Jones of the Southern District of New York recently ruled that the city could not intervene in the ongoing sale of properties owned by Pinnacle Group, one of the city’s largest landlords. The company declared bankruptcy in May after defaulting on $560 million in loans, and the Mamdani administration has claimed it owes the city $12.7 million in unpaid housing code fines.
Mamdani had directed the city’s Law Department to intervene, arguing the deal could worsen housing instability for thousands of tenants living in subsidized apartments. But Judge Jones rejected the city’s motion, saying the bankruptcy auction must move forward.
Pinnacle, owned by billionaire Joel Wiener, controls more than 140 buildings and 9,000 units across the five boroughs. Court filings show Summit Real Estate Holdings has offered $450 million to buy roughly 90 of the company’s 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,” said Ken Fisher, an attorney representing Pinnacle.
City lawyers countered in filings that Summit might not have the financial strength to rehabilitate the buildings, warning that “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.”
Tenant groups opposing the sale say Pinnacle has neglected maintenance and allowed conditions to deteriorate, while others fear the new owners could raise rents or further reduce oversight.
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The battle over Pinnacle’s holdings became a flashpoint during the mayoral race, where Mamdani campaigned on preserving rent-subsidized housing and protecting low-income tenants. On inauguration day, he visited one of the properties in Brooklyn to criticize the company’s record.
The court defeat also adds political strain for Mamdani as he defends his choice of Cea Weaver to head the Mayor’s Office to Protect Tenants. Weaver has faced criticism for past posts describing homeownership as “a weapon of white supremacy.” She later apologized, calling the comments “poorly phrased and not reflective of my work.”
Mamdani met with President Donald Trump at the White House on Thursday, which was a surprise as the two men spoke about building more homes in New York City.
The meeting was not on the president’s schedule or on Mamdani’s schedule, who became mayor of the city last month. It happens on the same day that the Department of Homeland Security took a Columbia University student into custody.
Mamdani called the meeting “productive,” and a picture of him with the president showed Trump holding two printouts of New York Daily News front pages, one real and one fake, that Mamdani had given him. According to the New York Times, the fake printout tried to make it look like Trump was in favor of building more housing in New York City.
“Just got off the phone with President Trump,” Mamdani posted on X. “In our meeting earlier, I shared my concerns about Columbia student Elmina Aghayeva, who was detained by ICE this morning. He has just informed me that she will be released imminently.”
Columbia officials and Manhattan Borough President Brad Hoylman-Sigal said that the immigration enforcement agents had lied about who they were to get into a building on campus. For example, they said they were looking for a missing person.
The school made it clear that police officers must show a court order or subpoena to get into private areas of the university, such as housing and classrooms.
