Judge overrules Amazon’s objection amid restructuring efforts
Saks Global has received approval from a US bankruptcy court to access $400 million in emergency financing, despite opposition from Amazon, Fashion Network reports. The decision was issued on Wednesday by Judge Alfredo Perez during a hearing in Houston.
The judge said the financing gives the luxury retailer a real chance to stabilize operations and restructure its debt. Restructuring chief Mark Weinstein told the court that without the funding, the company would not have been able to continue operating. The cash will be used to pay suppliers and approximately 17,000 employees.
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Saks Global filed for creditor protection on Tuesday evening, reporting total liabilities of $3.4 billion. Financial pressure intensified after a challenging merger with Neiman Marcus, which strained liquidity and disrupted inventory replenishment.
Saks Global attorney Debra Sinclair said all stores remain open and customer demand remains intact. “Customers are there, and that’s evident because when we have product in stores, it sells. The major issue, which you will hear frequently this week, is that we have not been able to purchase enough inventory to meet demand,” Sinclair told the court.
The $400 million loan marks the first tranche of a broader financing package valued at about $1.75 billion. Judge Perez rejected Amazon’s objection that its $475 million equity investment would be rendered “worthless.” Amazon’s attorney Caroline Reckler said the company had “very little or almost no confidence” in a successful exit from bankruptcy.
The court also approved procedural requests allowing Saks Global to pay overdue amounts to essential suppliers, including Chanel and Kering.
Photo: CNBC
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