Major NYC Landlord Puts Thousands of Units in Bankruptcy

(Bloomberg) -- Joel Wiener, a major owner of New York City apartments, has put properties with thousands of residential units into bankruptcy months after a bank sought to foreclose on them.

Numerous property holding companies tied to Wiener’s Pinnacle Group sought court protection Wednesday in New York. The properties listed assets and liabilities of between $500 million and $1 billion on Chapter 11 petitions, each of which was signed by Wiener, who is Pinnacle’s chief executive officer. 

The bankruptcies were filed months after Flagstar Bank initiated foreclosure actions in state court against the properties. Filing Chapter 11 immediately pauses legal actions brought against the companies.

The companies put into bankruptcy cover apartment buildings in Manhattan, Brooklyn, Queens and the Bronx, according to court documents. Lawyers representing the companies in the foreclosure actions notified the state court of the bankruptcy filings on Thursday. 

A Pinnacle spokesperson declined to comment.

Pinnacle and its related corporate affiliates aren’t part of the Chapter 11 filings. The holding companies are represented by the law firm Weil, Gotshal & Manges LLP and financial adviser FTI Consulting Inc., according to court documents.

Wiener accumulated a fortune through ownership of rent-regulated apartments in New York City. He has previously sold shekel-denominated debt backed by a portfolio of properties owned by Pinnacle Group and trade in Tel Aviv under the name Zarasai Group Ltd. 

Joel, along with family members and trusts, own the ordinary shares of Zarasai Ltd., which is a privately-held company incorporated in the British Virgin Islands, according to bankruptcy court papers. Zarasai Group has around $216 million-equivalent of outstanding bonds and its 5.45% bonds due in 2025 that trade near 87 cents on the dollar, down from near par at the start of the year, according to data compiled by Bloomberg. 

The case is Broadway Realty I Co. LLC, number 25-11050, in the U.S. Bankruptcy Court for the Southern District of New York.

--With assistance from Georgia Hall.

(Updates with context and related debt in paragraphs seven and eight.)

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