A federal bankruptcy judge on Thursday rejected an attempt by Mayor Zohran Mamdani’s administration to delay the sale of thousands of rent-stabilized apartments owned by the real estate firm Pinnacle Group — complicating a citywide tenants union’s mission to steer their homes to what it sees as a more responsible owner, and delivering Mamdani an early setback.

Hours after taking office last week, Mamdani instructed the city’s law department to intervene in the looming bankruptcy sale of more than 90 buildings with a combined 5,100 rent-stabilized apartments all owned by Pinnacle. The properties had fallen into disrepair and amassed thousands of housing code violations under the company, which declared bankruptcy after defaulting on its loans totaling more than $560 million last year.

The bankruptcy prompted a citywide network of Pinnacle tenants to organize in an attempt to slow a potential sale and find another buyer. But last month, another real estate company, Summit Properties USA, lined up a $451 million bid for the apartment buildings.

The Union of Pinnacle Tenants says it fears Summit would perpetuate the same practices as the current landlord, which neglected maintenance, failed to pay its electrical bills in building common areas and allowed apartments to deteriorate.

In a court filing Monday, attorneys for the city questioned Summit’s bid and said it was unclear whether the company would be able to handle repairs and maintenance in the buildings while also having enough money to pay off its own loans and earn a profit, given that rents are regulated in most of the apartments.

Mamdani and his pick to lead the city’s Law Department, Steven Banks, announced Jan. 1 they would intervene in the case because the city is itself a substantial creditor. Pinnacle owes the city’s housing agency roughly $12.7 million in unpaid fines, according to the court filing.

Judge David Jones refused to grant the reprieve, however, in a Thursday ruling.

Mayor Zohran Mamdani visited a building owned by Pinnacle Group in Flatbush, Brooklyn the same day he was inaugurated.

Michael Appleton/Mayoral Photography Office

Tracy Rosenthal, an organizer with the Union of Pinnacle Tenants, said residents will continue to challenge the sale and find an alternative plan.

“The Union of Pinnacle Tenants is not giving up the fight for 5,000 rent-stabilized homes,” Rosenthal said.

Rosenthal also pointed to potential familial ties between Pinnacle and Summit, following reporting by the real estate news outlet BisNow. The outlet reported that the brother of Pinnacle’s owner, Joel Wiener, has signed deeds for properties owned by Summit. The brother, Jonathan Wiener, is head of another real estate firm, Chestnut Holdings.

A review of properties listed on the Summit website shows several are also linked to a company called Denali Management, which provides property management for Chestnut Holdings’ buildings. Gothamist has identified at least one property listed on Summit’s website — located at 574 East 139th St. — where a person named Jonathan Wiener signed the building’s most recent deed on behalf of Denali Management.

A spokesperson for Summit did not respond to a request for comment. Phone numbers listed for Chestnut Holdings were disconnected and the company’s website appears to no longer exist. The company did not immediately respond to questions sent by email. Denali did not respond to a message submitted on Thursday through its website.

Tenants and attorneys said it was still too early to determine what will happen next, given that they have until Sunday to file objections and until next Thursday for the judge to confirm the sale. Other bidders for the properties could still emerge, said Elizabeth-Ann Tierney, an attorney for the Legal Aid Society who is representing tenants suing Pinnacle for repairs in their Manhattan apartment building.

“We don’t know if there are other bidders that will result in an actual auction or if it’s Summit or bust,” Tierney said.

Leila Bozorg, the city’s deputy mayor for housing, said officials are “assessing our options.”

“We will continue to fight to ensure any owner of this portfolio makes necessary repairs to bring the buildings up to code and respects the rent stabilization regulations,” Bozorg said in a written statement.

A Pinnacle attorney did not immediately respond to a request for comment. The attorney, Ken Fisher, previously told Gothamist that the sale would be in the best interest of tenants and creditors alike.

“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,” Fisher said in a written statement Tuesday.

Cea Weaver is Mamdani’s pick to lead the newly revived Mayor’s Officer to Protect Tenants.

Michael Appleton/Mayoral Photography Office

The fate of the Pinnacle-owned apartments, and the thousands of tenants living in them, has become a flashpoint in a larger debate over housing policy in the five boroughs.

Pinnacle purchased many of the properties decades ago and employed a common business model of raising rents and deregulating the apartments to pay lenders and increase revenue. Their tactics to evict tenants and increase rents on the vacant apartmentsreceived scrutiny in 2006 from state and city prosecutors, including the Manhattan district attorney’s office and then-Attorney General Elliot Spitzer, and the company settled a tenant harassment case for more than $2 million in 2011.

A package of 2019 tenant protection laws upended Pinnacle’s business by prohibiting landlords from removing units from the rent-stabilization system in most cases and from raising rents on vacant units The company failed to pay its lender Flagstar before declaring for bankruptcy in May 2025.

Landlords and real estate groups have panned the 2019 laws and say the cap on revenue had prevented owners from investing in their buildings and led to worsening conditions, including a spike in dangerous housing code violations.

Mamdani campaigned on aggressively penalizing property owners who fail to maintain their apartment buildings, and on freezing rents for tenants in rent-stabilized apartments. He appeared at a Pinnacle building in Flatbush hours after his inauguration to announce the city’s plan to intervene in the bankruptcy case on Jan. 1.

But the early attempt was unsuccessful. The setback could add to an already difficult first week for the new mayor when it comes to housing after his close adviser and pick to lead the Mayor’s Office to Protect Tenants, Cea Weaver, faced intense scrutiny for years-old social media posts, like a tweet calling homeownership a “weapon of white supremacy.”

Mamdani said he would retain Weaver, who has called the past statements “regretful.”