Key facts
- Saks Global's Chapter 11 bankruptcy restructuring plan was approved by U.S. Bankruptcy Judge Alfredo Perez.
Saks Global's Chapter 11 bankruptcy restructuring plan has been approved by U.S. Bankruptcy Judge Alfredo Perez. The company will emerge with reduced debt and a smaller store footprint, transferring control to its senior lenders.
Saks Global has received court approval for its Chapter 11 bankruptcy restructuring, allowing it to emerge from bankruptcy with a significantly reduced debt load and a smaller physical presence. U.S. Bankruptcy Judge Alfredo Perez approved the plan in Houston, Texas, commending the company's efforts to stabilize its business after filing for bankruptcy on January 13 with $3.4 billion in debt. The restructuring, which was necessitated by cash shortfalls following an ill-fated merger with Neiman Marcus, will see the company's equity wiped out and control handed over to its senior lenders. These lenders provided $1 billion in new funding during the bankruptcy process and pledged an additional $500 million post-exit. Saks Global will operate with 49 luxury retail locations, including 15 Saks Fifth Avenue stores, 33 Neiman Marcus stores, and Bergdorf Goodman, a reduction from its previous 33 Saks Fifth Avenue locations. To gain the support of junior creditors, who are collectively owed about $1.5 billion, Saks Global agreed to establish a litigation trust with an initial $20 million in funding to pursue lawsuits for potential recovery.
The approval allows Saks Global to reduce its debt by nearly 75% and continue operations, signaling a path toward financial stability for the luxury retailer.