Exclusive: Neiman Marcus Advances Bankruptcy Preparations—Sources
NEW YORK—Neiman Marcus Group is stepping up preparations to seek bankruptcy protection, after the CC..
NEW YORK—Neiman Marcus Group is stepping up preparations to seek bankruptcy protection, after the CCP virus pandemic forced the debt-laden luxury department store chain to close its stores, people familiar with the matter said on Thursday.
Neiman began holding confidential discussions this week with bondholders about possible financing that would help the company continue operating while under bankruptcy protection, the sources said. The company has also started similar discussions in recent days with its lenders, one of the sources said.
Up until this week, Neiman had received inquiries from creditors about its next moves but had not commenced discussions about a possible bankruptcy, some of the sources said.
Even though these talks are advancing, the Dallas-based retailer is several weeks away from a potential bankruptcy, and it is still possible that it manages to escape it, the sources said.
Creditors could give Neiman additional time to make upcoming debt payments due this month while restructuring discussions continue, which could result in a transaction that reworks financial obligations outside of bankruptcy proceedings, the sources added.
The sources asked not to be identified because the matter is confidential. Neiman declined to comment. Last month, the company said it was “evaluating all courses of action to preserve our financial strength” because of the coronavirus pandemic.
Neiman reached a deal last year with creditors to rework debt and avoid a bankruptcy filing, gaining more financial breathing room. But the outbreak caused by CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus, forced the company to close all Neiman, Bergdorf Goodman and Last Call stores it operates through the end of April, and furlough most of its 14,000 employees.
The closures have resulted in a cash crunch just before significant interest payments on portions of its more than $4 billion of debt are due starting April 15.
Portions of Neiman Marcuss term loan were trading at roughly 40 cents on the dollar this week, well below face value, indicating significant investor concerns about repayment, according to Refinitiv Eikon data. The price for a set of Neiman bonds has also fallen.
Neiman has struggled following a $6 billion leveraged buyout by private equity firm Ares Management Corp and Canada Pension Plan Investment Board in 2013. Like many traditional brick-and-mortar retailers, it has faced relentless competition from e-commerce giant Amazon.com. Ares had no immediate coRead More – Source
