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 ruled Friday 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, who took office last week, 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.
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.”
Meanwhile, Mamdani’s Democratic Socialist allies are facing scrutiny for their role in nationwide anti-Trump protests. The Democratic Socialists of America (DSA) — where Mamdani is a prominent figure — and a network of far-left activist groups tied to Chinese Communist Party-linked businessman Neville Singham have coordinated protests against the Trump administration’s ICE operations and the arrest of Venezuelan dictator Nicolás Maduro.
The protests, organized under the slogan “No Wars. No Kings. No ICE.”, are being led by the DSA, the Party for Socialism and Liberation (PSL), and the People’s Forum, a Marxist-aligned activist group funded in part by Singham.
The GOP-led House Oversight Committee voted Thursday to subpoena Singham for records on his network’s U.S. organizing and financial ties.
According to 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 stage protests in more than 30 U.S. cities, accusing the administration of “imperialist war abroad and fascist terror at home.”
As the legal fight over New York’s housing crisis unfolds, the city’s new socialist mayor is now facing challenges on multiple fronts — from Wall Street lenders in bankruptcy court to federal investigators scrutinizing the far-left networks aligned with his political base.
