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New York City has formally challenged efforts by Pinnacle Group and its affiliated debtors to reorganize and sell their residential properties through bankruptcy, arguing that the landlord cannot offload its buildings without first addressing thousands of unresolved housing code violations.

In an objection filed Tuesday, the city urged the bankruptcy court to halt Pinnacle’s Chapter 11 plan and proposed sale of its portfolio to stalking-horse bidder Summit Gold Inc. City officials contend the transaction cannot proceed “free and clear” when Pinnacle-controlled properties collectively carry more than 5,000 outstanding code violations and roughly 14,000 tenant complaints across approximately 5,000 apartments.

“Property cannot be sold in bankruptcy free of the obligation to correct underlying violations of the city’s housing and building codes,” the city said in its filing.

Mayor Zohran Mamdani spotlighted the objection during his inauguration week, framing the city’s intervention as a turning point for renters living in what he described as some of New York’s most neglected buildings. His administration said the move reflects a broader effort to strengthen tenant protections and use the bankruptcy process to push for repairs and improved living conditions.

“New York City will take action to seek immediate relief and improve living conditions for Pinnacle tenants,” the mayor’s office said, calling the step unprecedented.

City agencies had previously warned the bankruptcy court about the pace of the proposed sale. In a letter filed Dec. 11, the Department of Housing Preservation and Development asked U.S. Bankruptcy Judge David Jones to slow the auction process to ensure tenant rights were not sidelined.

Tenants have echoed those concerns. In a filing submitted Dec. 16, a resident described widespread neglect across Pinnacle properties, citing infestations, mold, structural decay and chronic maintenance failures. The tenant argued that residents should have a meaningful role in bankruptcy proceedings that directly affect their homes.

Shortly after taking office, Mamdani announced the objection publicly and signed his first executive orders inside the lobby of a Pinnacle-owned building. Standing alongside tenant organizers and the newly appointed head of the Mayor’s Office to Protect Tenants, he criticized the landlord’s track record.

“This building is owned by Pinnacle Realty, a notorious landlord whose name is all too familiar to too many tenants in New York City,” Mamdani said, referencing complaints about inadequate heat, pest infestations and unsafe conditions. “No longer will government turn a blind eye.”

Mamdani also pointed to concerns about Summit Gold, noting that the company has previously been cited by the city’s Public Advocate as among the worst landlords in New York. Tenant advocates say that raises fears the sale would merely transfer properties from one problematic owner to another.

“Our homes were set to be passed from one slumlord to another,” the Union of Pinnacle Tenants said in a statement supporting the city’s objection.

Pinnacle Group filed for Chapter 11 protection in May, listing more than $500 million in assets and liabilities spread across 82 holding entities. Court filings show the debtors are carrying approximately $564 million in mortgage debt owed to Flagstar Bank, obligations they say became increasingly difficult to service as interest rates rose.

The company has also blamed its financial distress on changes to New York’s rent laws enacted in 2019, including limits on rent increases when apartments change tenants.

Earlier this year, Flagstar Bank initiated multiple pre-foreclosure actions against entities tied to more than 5,000 Pinnacle units, covering the majority of apartments included in the bankruptcy case, according to industry data.

Pinnacle did not immediately respond to a request for comment.

The case is pending in the U.S. Bankruptcy Court for the Southern District of New York.