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Key Takeaways
- Amazon challenges Saks Global Enterprises’ Chapter 11 bankruptcy filing, arguing against the proposed $1.75 billion financing.
- Amazon had invested $475 million in Saks as part of their 2024 acquisition of Neiman Marcus for $2.65 billion.
When the luxury retailer has stepped into Chapter 11 and sought financing to subordinate the tech giant’s equity, Amazon is fighting to salvage a stake in Saks Global.
In 2024, Amazon invested $475 million in preferred equity to help Saks complete its $2.65 billion acquisition of Neiman Marcus.
The two companies had a commercial deal whereby Saks agreed to sell its products on Amazon, pay referral fees and guarantee at least $900 million in payments to Amazon over eight years.
Yet, the financial performance of Saks deteriorated rapidly poor budget and high cash burn; unpaid invoices were not paid. The company filed for bankruptcy protection on January 13 after a period of heavy financial pressure from .
The company has earned $1 from . Among its 75 billion financing, it paid vendors and employees with an immediate cash infusion (DIP loan) of $1 billion to pay workers and other businesses; another $500 million when they left bankruptcy was available.
Amazon, which filed court papers Wednesday in a lawsuit against the proposed bankruptcy financing, has opposed it, saying that it would overburden Saks with new debt and negatively affect unsecured creditors.
Amazon previously refused to accept a critical part of the loan, but Saks continued with existing lender financing, saying that it would stabilize operations and keep all stores open.
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