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TexasTowelie

(111,288 posts)
Mon Sep 24, 2018, 03:10 AM Sep 2018

Creditor accuses Neiman Marcus of triggering debt default by moving key unit out of reach

A creditor of Neiman Marcus Group is questioning whether the struggling Dallas-based retailer defaulted on its debt by shuffling one of its most promising business units beyond the reach of creditors.

Marble Ridge Capital LP said Friday in a statement that Neiman Marcus' recent transfer of its MyTheresa unit was improper, and may have violated terms of company debt that the New York-based fund holds. Marble Ridge said it sent a Sept. 18 letter to the board demanding the rationale behind the transfer of MyTheresa, the German online luxury retailer, to Neiman Marcus' corporate parent, a change that could block creditors from making any claims on the unit.

The switch lets Neiman Marcus's owners, Ares Management LP and Canada Pension Plan Investment Board, "usurp this massive benefit" for no consideration to the company, Marble Ridge said. What's more, Neiman Marcus was either insolvent at the time of the transfer or was made insolvent by the deal, said the fund, a distressed-debt investor that owns 8.75 percent senior notes and term loans.

"MyTheresa was already an unrestricted, non-guarantor subsidiary not part of our lenders' collateral and it will remain outside of the collateral," a representative from Neiman said in a statement. "This reorganization was expressly permitted by the company's credit documents."

Read more: https://www.dallasnews.com/business/retail/2018/09/21/neiman-marcus-creditor-said-retailer-may-triggered-default-after-moving-asset

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