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New York City has formally objected to the proposed reorganization and sale of properties owned by entities affiliated with Pinnacle Group, arguing the landlord cannot transfer its buildings through bankruptcy without first addressing thousands of housing and safety violations.

In a filing Tuesday in U.S. Bankruptcy Court for the Southern District of New York, the city challenged Pinnacle’s Chapter 11 plan and its proposed sale to stalking horse bidder Summit Gold Inc., contending the transaction cannot proceed “free and clear” while more than 5,000 code violations and roughly 14,000 tenant complaints remain unresolved across about 5,000 housing units.

“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 objection.

Newly inaugurated Mayor Zohran Mamdani publicly backed the filing on Thursday, aligning his administration with tenant organizers who have pushed for a slower bankruptcy process to secure repairs and improved living conditions. The mayor’s office described the move as an unprecedented step on behalf of renters living in what it called some of the city’s “most neglected buildings.”

Hours after taking office, Mamdani announced the objection from the lobby of a Pinnacle-owned building, signing his first executive orders while standing alongside tenant advocates and the newly appointed director of the Mayor’s Office to Protect Tenants.

“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, citing reports of “lack of heat, roaches and the kind of conditions no tenant should have to live through.”

He added that the city would no longer “turn a blind eye” to conditions affecting working-class tenants, particularly in communities of color.

The city’s Department of Housing Preservation and Development had previously urged Bankruptcy Judge David Jones to slow the auction process to ensure tenant protections were preserved. A tenant filing submitted in mid-December accused Pinnacle management of severe neglect, including allowing mold, rodents and structural decay to persist.

Tenant groups also criticized the proposed buyer. Summit Gold, designated as stalking horse bidder in late December, has previously been labeled one of the city’s worst landlords by the Office of the Public Advocate. The Union of Pinnacle Tenants said the sale risked transferring properties “from one slumlord to another.”

Pinnacle-affiliated entities filed for Chapter 11 protection in May, listing more than $500 million in assets and liabilities across 82 holding companies. Court filings show approximately $564 million in mortgage debt owed to Flagstar Bank, which the debtors said became increasingly difficult to service as interest rates rose.

The debtors also cited changes to New York’s rent laws enacted in 2019, including limits on rent increases following tenant turnover, as a key factor in their financial distress. In March, Flagstar Bank filed multiple pre-foreclosure actions involving roughly 5,200 Pinnacle units, according to industry data.

A representative for Pinnacle did not respond to a request for comment.

The case is In re: Broadway Realty LLC, case number 1:25-bk-11050, in the U.S. Bankruptcy Court for the Southern District of New York