Amazon filed an objection to the debtor-in-possession financing proposal in the Saks Global Chapter 11 bankruptcy proceeded, arguing the arrangement undermines a position Amazon took in Saks when the luxury retailer purchased Neiman Marcus.
In a filing with the United States Bankruptcy Court for Southern Texas, Amazon stated it objects to the Global Debtors’ DIP financing motion. Amazon said it extended credit to Saks based on what was termed an “equity cushion” based on the value of Saks Fifth Avenue flagship store. Now Saks and certain of its creditors want to use that same value to secure $2.6 billion in DIP financing.
According to the Amazon court filing, the DIP facility uses the value at the flagship location “to prop up the other Saks debtors for the benefit of those other entities’ creditors” and at the expense of the creditors secured by the value associated with the flagship location.
As it announced the bankruptcy filing, Saks reported it had secured a financing commitment of $1.75 billion, comprising $1.5 billion from an ad hoc group of the company’s senior secured bondholders and $240 million of incremental liquidity from the company’s asset-based lenders.
In making its objection to the DIP financing, Amazon stated that in December 2024, Amazon invested $475 million of preferred equity in Saks through HBC GP, Saks’ parent company at the time, in connection with the acquisition of Neiman Marcus. However, Amazon asserted in its filing that equity investment is presumptively worthless after Saks continuously failed to meet budgets and “burned through hundreds of millions of dollars of cash in less than a year and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners.”
Amazon also claims Saks failed to uphold commitments that were part of the investment terms and, through the Saks bankruptcy and DIP actions, would undermine Amazon’s security in the flagship entity.
Saks did not immediately respond to a contact from HomePage News requesting comment on the Amazon filing.
