(Bloomberg) -- Real estate investment firm Summit Properties USA won court approval for its $451 million purchase of apartments placed into bankruptcy in May by Pinnacle Group LLC, overcoming legal objections from New York City Mayor Zohran Mamdani.
U.S. Bankruptcy Judge David Jones approved the transaction Friday, after rejecting earlier efforts by city and state officials to delay the hearing. Mamdani’s administration challenged the deal shortly after he took office on Jan. 1, arguing it should be paused to allow for further review and engagement with tenants. The objections came months after the court had already approved sale deadlines supported by lender Flagstar Bank NA.
The sale includes $113 million in equity from Summit and $338.5 million in financing from Flagstar. Summit Chief Executive Officer Zohar Levy testified that the firm has set aside $30 million for repairs and maintenance at roughly 5,200 mostly rent-stabilized apartments across the Bronx, Manhattan, Queens and Brooklyn.
“The sale is the outcome of an eight-month long court-approved public process,” Pinnacle lawyer Ken Fisher said in an emailed statement. “The company, its independent chief restructuring officers and advisors appreciate the court’s recognition that this outcome, achieved in challenging circumstances, is the best available for all constituencies, and hopes the City does too.”
Pinnacle sought Chapter 11 protection in May, listing more than $564 million in debt. Advisers have blamed the filing on higher interest rates, rising operating costs tied to inflation and weaker rent collections.
Mamdani met with tenants at a Pinnacle-owned building in Brooklyn on his first day in office. Tenants at several Pinnacle properties have said the landlord had for years been slow to respond to repair requests.
Garrett Fail, a lawyer for the Pinnacle debtors, said Thursday that the buildings had been actively managed and that maintenance issues were addressed as they arose.
The case is Broadway Realty I Co. LLC, No. 25-11050, U.S. Bankruptcy Court for the Southern District of New York.
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