When Pinnacle Group placed thousands of rent-stabilized New York apartments into bankruptcy, it found itself in a fight with Mayor Zohran Mamdani’s administration — and with tenants.
Now, portions of that fight continue to play out in bankruptcy court.
Tenants at one of the buildings placed into bankruptcy have asked a judge to order a Pinnacle affiliate to make repairs to the property. The tenants first took the owner to housing court over living conditions in 2023.
Bankruptcy court is most often a battleground for lenders and borrowers. But tenants and Mamdani’s administration raised the profile of the Pinnacle case with novel attempts to use bankruptcy court as a venue to fight about housing conditions and prospective buyers.
Although they were unsuccessful in their efforts to stop a sale, the motion shows they haven’t totally abandoned the strategy.
“The entire time that the bankruptcy process has been playing itself out they’ve had no recourse, they’ve had no forum to which they could turn to get these repairs ordered,” said LT Tierney, a staff attorney at the Legal Aid Society who is co-counsel for the tenants behind the motion. “They shouldn’t have to wait any longer.”
Tenants’ attorneys are still hoping they can make bankruptcy court work for them, in part because they have few other options. The bankruptcy stayed all litigation, including housing court cases.
Tenants at 639-645 West 207th Street brought their landlord to housing court in 2023, alleging their building was in disrepair. They later moved for contempt against the Pinnacle affiliate. In February 2025, the two parties settled, with Pinnacle committing to cure violations by June 2025.
But now those tenants say their issues haven’t been addressed. In court documents, they complain of broken windows, collapsing ceilings, and rats.
They’re hoping the judge in the case will order the landlord to make repairs, even though there’s a pending sale to Summit Properties. Part of the argument they’re making is that Pinnacle is failing to maintain its primary asset, which is bad for creditors as well as residents.
A spokesperson for Summit said the company was aware of the litigation and, “upon closing, will address all outstanding claims on a case-by-case basis.”
Tenants and the Mamdani administration tried to stop the sale of the portfolio at the beginning of the year, hoping for more time for a more mission-driven buyer to emerge. But after hours of testimony and argument, the judge confirmed the bankruptcy plan in January. Summit bid about $451 million for the 5,151 mostly rent-stabilized apartments.
Tenants drew attention to hazardous housing code violations in the portfolio, but Summit CEO Zohar Levy testified that only 8 percent of the units had open violations. Summit would spend $10 million curing those, he said, along with another $20 million devoted to repairs and maintenance over the next five years.
The Pinnacle affiliates entered bankruptcy owing mortgage holder Flagstar Bank $564 million. In filings, Pinnacle head Joel Wiener blamed the financial trouble on elevated interest rates and statewide legislation that made it nearly impossible to raise rents in stabilized apartments.
A spokesperson for Pinnacle Group declined to comment.
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