We study the phase structure of a U(1) Y′ model and consider the cosmological consequences of lepton-number violating heavy neutrino decays. In the perturbative region the phase transition is shown to be a two-step process, and the heavy neutrinos get massive before the sphaleron mediated B+ L breaking transitions freeze out. If the scale of B− L breaking is O(1) TeV, we find that annihilation processes keep neutrinos in equilibrium so that when they decay, their density is diluted so much that the observed baryon asymmetry of the universe is unlikely to be explained by the heavy neutrino decays. If the scale of U(1) Y′ breaking is large with m N⪆101 GeV and M Z′/m N⪆3 × 10 3 , annihilations are no longer important and it may be possible to generate considerable baryon asymmetry which, however, requires fine-tuning of the parameters of the scalar potential.