Federal Judge Blocks NYC Bankruptcy Sale In Major Blow to Mamdani

City lawyers argued in filings that Summit might not have enough money to fix 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.

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.

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.