Neiman Marcus investors to challenge bankruptcy deal, call for sale

Department store chain is expected to file imminently, after having to temporarily shutter stores

National /
Apr.April 27, 2020 09:30 AM
Neiman Marcus at Hudson Yards in New York and Neiman Marcus CEO Geoffroy van Raemdonck (Credit: Neiman Marcus by Noam Galai/Getty Images; van Raemdonck by JOE SCHILDHORN/Patrick McMullan via Getty Images )

Neiman Marcus at Hudson Yards in New York and Neiman Marcus CEO Geoffroy van Raemdonck (Credit: Neiman Marcus by Noam Galai/Getty Images; van Raemdonck by JOE SCHILDHORN/Patrick McMullan via Getty Images )

A group of investors in Neiman Marcus plan to challenge the $600 million financing package that the department store operator has arranged for its imminent bankruptcy.

Instead, Mudrick Capital Management LP and Daniel Loeb’s hedge fund Third Point LLC are calling on the retailer to find a buyer, according to Reuters. Mudrick recently submitted a $700 million proposal to Neiman Marcus for debtor-in-possession financing — a deal with terms that would require an attempt to sell.

The investors believe Hudson’s Bay Co, the owner of Saks Fifth Avenue, would be a logical buyer.

However, Neiman Marcus plans to use a $600 million loan from creditors including David Kempner Capital Management and Sixth Street Partners instead. Its current plan would ask creditors to forgive most of its $5 billion in debt in exchange for ownership stakes in the company.

A bankruptcy judge has final approval of the retailer’s financing, and the investors behind the new proposed loan plan to argue in court that their fees are less expensive.

Neiman Marcus’ pending bankruptcy could be a devastating blow for Related and Oxford Properties’ Hudson Yards mall, as it could force the owners to renegotiate the company’s lease and have conversations with retailers that have lease agreements linked to Neiman’s presence in the mall. [Reuters] — Eddie Small


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