A citywide coalition of tenants has been trying for months to prevent their homes from being sold by what they say is one bad landlord to another.

They won a significant victory last week when Mayor Zohran Mamdani arrived at one of their apartment buildings in Brooklyn, mere hours after his inauguration, to announce that the city would take a more proactive approach in a looming bankruptcy sale. But they lack one key element: time.

The Mamdani administration is now attempting to carve out more breathing room to develop an alternative. Lawyers for the city filed a formal request late Monday to delay the sale for 30 days, making good on Mamdani’s pledge to intervene in the case.

The Union of Pinnacle Tenants says residents have faced years of neglect and deteriorating conditions. Their landlord, a real-estate firm called Pinnacle Group, owns dozens of buildings across the city and has a reputation for skimping on maintenance.

The company declared bankruptcy in May 2025 after defaulting on its loan, and said rules limiting rent increases have left it unable to afford basic upkeep of its properties

Cynthia Rose, a Pinnacle tenant leader in Brooklyn, said the group’s goal is to stop the buildings from being purchased “by another set of slumlords” and instead ensure a more responsible owner takes over.

But a bankruptcy judge has already scheduled a sale for Jan. 8, and another large real estate firm has already lined up a $451 million bid, court records show.

“We’re just simply asking to give us more time so that we can have a say,” said Vivian Kuo, the tenant association president at another Pinnacle building in Harlem.

The legal challenge marks the new Mamdani administration’s first attempt to improve conditions for New York City renters by acquiring or transferring their apartment buildings to new owners.

Mamdani has empowered a Mayor’s Office to Protect Tenants to hold negligent landlords accountable and, in some instances, force them to sell their buildings to nonprofits, private companies, tenant groups or the city itself.

What happens next will be up to federal bankruptcy judge David Jones, who may prioritize the impact on creditors — like Pinnacle’s lender — over the needs of tenants.

But as officials from the new Mamdani administration noted last week, the city itself is one of the company’s biggest creditors. In a court filing, city attorneys say Pinnacle owes the Department of Housing Preservation and Development roughly $12.7 million in unpaid fines. And Mamdani’s nominee as the city’s top lawyer, Steven Banks, made it clear that he plans to use that role as leverage in the case.

Pinnacle defaulted on its loans for 91 buildings with about 5,500 apartments, most of them rent-stabilized.

The company has amassed more than 5,000 housing code violations for dangerous living conditions across its portfolio, which spans every borough but Staten Island, according to the mayor’s office. Tenants have complained of mold blooms, crumbling ceilings, rat infestations and monthslong elevator outages.

Pinnacle’s debts, more than $560 million, prompted the company to file for bankruptcy last year. The looming bankruptcy sale spurred the coalition of Pinnacle tenants to organize and try to come up with other ways to acquire the properties in conjunction with the city, nonprofit groups and private developers.

But the prospective buyer, a company called Summit Properties USA, is ready to act now. Summit did not respond to requests for comment.

Ken Fisher, a lawyer for Pinnacle, said the sale process was “well underway” and in the best interest of residents and creditors.

“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.

In the court filing Monday, city lawyers disagreed. They also questioned Summit’s ability to address the various problems in the buildings and keep up with ongoing maintenance, “given the regulated rents” that suppress landlord revenue. And they said Pinnacle and Summit have not conducted a physical needs assessment to determine the true cost of repairs.

If the bankruptcy court judge grants the 30-day extension, it would give the city and tenants more time to find other buyers, who would likely receive low-interest loans and other funds from the city’s Department of Housing Preservation and Development.

Past approaches

Banks, who also served as commissioner of the Department of Social Services under Mayor Bill de Blasio, said city officials have in the past come up with creative ways to acquire buildings in similar condition.

In 2019 and 2021, Banks steered the purchase of more than 30 apartment buildings the city had been leasing as temporary homeless shelters through what was known as the “cluster site” program. Through the arrangement, the city paid exorbitant rents to notorious landlords who often presided over dangerous apartment conditions.

Under the plan the city eventually adopted at the time, officials transferred the buildings to nonprofit developers to renovate and rent to formerly homeless families as permanent apartments, not temporary shelter units.

He also described how, in the late 1980s and early 1990s, the city and homeless rights advocates coordinated to purchase decrepit hotels in Midtown that were used as homeless shelters after their owners had filed for bankruptcy.

The city then provided low-cost loans to nonprofit organizations that turned the buildings into some of the first supportive housing sites for homeless families and individuals.

‘We came up with a pathway forward when people said it wasn’t possible,” Banks said at the Jan. 1 event in Flatbush.

Rosanne Haggerty, founder of the organization Breaking Ground, was instrumental in the 1991 deal to acquire the 735-unit Times Square hotel after a succession of negligent landlords let hazardous conditions fester.

Haggerty said time constraints, like the ones Pinnacle tenants are facing now, can spur action from the city that usually takes months or years to plan and approve.

“There is nothing like a bankruptcy proceeding with a really antsy judge to make big things happen and force decisions,” she said.

Still, any deal put forth by the city would likely require a clear financial benefit for the lender, she said.

“It would have to be acceptable to the creditors,” Haggerty said.

Can the city’s intervention succeed?

Bankruptcy attorneys who spoke with Gothamist agreed and said they were skeptical that the city’s effort to halt the sale would work with a purchaser already lined up.

“What will be interesting here is if the city can articulate an argument based on the bankruptcy code to slow down or defeat the sale, or if the city’s position is seen as being based on social, moral considerations, which, for better or worse, bankruptcy law may not provide for,” said attorney Jeb Singer, who specializes in commercial bankruptcy law.

Several real estate investors and landlord representatives criticized the city’s legal argument and Mamdani’s attempt to slow the transaction.

“He’s undermining normal market practices and that dissuades people from investing in New York,” said Seth Glasser, a senior vice president focused on apartment sales at the investment firm Marcus & Millichap.

The real estate industry strongly opposed a measure approved by the City Council last month that would give nonprofit groups, tenant organizations and some private developers a chance to buy buildings in financial distress or with a significant number of violations before they hit the open market.

Former Mayor Eric Adams vetoed the legislation, known as the Community Opportunity to Purchase Act, just before leaving office last month. The measure would not have applied to buildings in foreclosure, like the Pinnacle portfolio.

The effort to transfer the Pinnacle buildings is far from a new concept. The city’s Department of Housing Preservation and Development routinely negotiates with landlords to sell their properties to nonprofits or other private owners that receive low-interest loans, tax breaks and other funding to preserve and manage affordable housing.

But given the scale of Pinnacle’s holdings, the company’s sale marks a far greater challenge than usual, said Arielle Hersh, policy director at the nonprofit housing group UHAB.

“New York City has intervened in similar cases in the past, but the size and scope of the Pinnacle bankruptcy is unique,” said Hersh, whose organization helps tenants and the city reach preservation deals.

Tenants, however, say they plan to keep up the fight, regardless of whether the judge agrees to stall the sale.

“We’re not going down easy,” said Kuo, the Harlem tenant association leader. “Whether or not Pinnacle is able to go through with the sale to Summit, that would be a grave decision, but we would put up another fight.”