FILE PHOTO: Signs outside the Neiman Marcus store can be seen during the Coronavirus Disease (COVID-1
(Reuters) – U.S. luxury department store chain Neiman Marcus Group announced Friday that it has received judicial approval to access $ 675 million of its debtor-owned financing to maintain the continuity of the company’s business during the Chapter 11 bankruptcy process to enable and allow payment to employees and suppliers.
The preliminary approval of his “First Day Applications” by the Houston Texas Southern District Insolvency Court came one day after the company filed for bankruptcy protection. This was one of the most famous breakdowns among retail stores that had to be temporarily closed in response to the COVID 19 pandemic.
Neiman Marcus filed for bankruptcy at a federal court in Houston and said on Thursday that he had reached an agreement with the creditors on $ 675 million in funding to support operations while he was trying to reorganize.
The Dallas-based retailer plans to surrender control to creditors to wipe out $ 4 billion in debt. The debt is currently around $ 5 billion.
The company expects to emerge from the Chapter 11 process in early autumn with a $ 750 million package of creditors who provided its first bankruptcy loan.
The retailer was founded in 1907 when the Marcus and Neiman families opened their first shop in Dallas. It expanded in the United States and became a mainstay for celebrities and other wealthy customers looking for expensive handbags, clothing, and the like.
Neiman Marcus has changed hands among private equity firms over the past 15 years and was eventually transferred to Ares Management Corp (ARES.N) and the Canada Pension Plan Investment Board on a debt-driven buyout of $ 6 billion.
Reporting by Kanishka Singh in Bengaluru; Arrangement by Raju Gopalakrishnan