NYC Looks to Protect City Interests in Apartment Bankruptcy Sale

Pinnacle Group’s deal to sell several bankrupt New York City apartment buildings for $451 million should stipulate that governmental obligations, such as property violations, carry over to the new owner, the city said.

Real estate firm Summit Properties USA can’t acquire the 5,100 apartment units free and clear of governmental interests, according to a filing Tuesday with the US Bankruptcy Court for the Southern District of New York.

“Property cannot be sold in bankruptcy free of the obligation to correct underlying violations of the City’s housing and building codes,” it said, noting that the bankrupt apartments “have many such obligations ...