FILE PHOTO: The signage outside the Neiman Marcus store is seen during the outbreak of coronavirus disease (COVID-1
(Reuters) – US luxury grocery chain Neiman Marcus Group on Friday said it was granted court approval to access $ 675 million in debt financing, which will enable continuity of the company’s operations during Chapter 11 bankruptcy proceedings and allow pay employees and suppliers.
The interim approval of its “First Day Proposal” from the Bankruptcy Court for the Southern District of Texas, Houston Division, came a day after the company filed for bankruptcy protection, marking one of the most high-profile collapses yet among retailers forced to temporarily close stocks in response to COVID-19 pandemic.
Neiman Marcus filed for bankruptcy in a federal court in Houston, saying on Thursday it had reached $ 675 million in debt financing from debtors to support operations while trying to reorganize.
The Dallas-based retailer plans to put credit to the creditors in exchange for eliminating $ 4 billion in debt. Its debt currently amounts to approximately $ 5 billion.
The company has said it expects to come out of the Chapter 11 lawsuit at the beginning of the fall with a $ 750 million package from creditors who provided its initial bankruptcy loan.
Founded in 1907 when the Marcus and Neiman families opened their first store in Dallas, the retailer across the United States expanded to become a parent staff of celebrities and other wealthy customers looking for expensive handbags, clothing and the like.
Neiman Marcus switched hands between private equity firms for the past 15 years and eventually sold to Ares Management Corp in 2013 (ARES.N) and the Canada Pension Plan Investment Board in a $ 6 billion debt purchase.
Reporting by Kanishka Singh in Bengaluru; Editing by Raju Gopalakrishnan