Neiman Marcus For Sale? Investors Push To Sell Retailer Instead Of Filing For Bankruptcy

After rumblings that Neiman Marcus was considering filing for bankruptcy protection, an investor group is calling for the department store retailer to sell itself instead.

According to sources for Reuters, Mudrick Capital Management LP, and hedge fund Third Point LLC, is looking to challenge the $600 million in financing that Neiman Marcus has planned for its bankruptcy filing to negotiate with its creditors.

Neiman Marcus is preparing its bankruptcy filing as soon as Monday, but Mudrick has supplied a $700 million proposal for debtor-in-possession (DIP) financing, the sources told the news outlet. The financing is reportedly expected to include Third Point and hedge fund, Fir Tree Partners.

Under Neiman Marcus’ plan for restructuring, the company is looking for debt forgiveness from its lenders in exchange for ownership of the company, but the investors are planning to challenge the bankruptcy proposal in court, claiming their fees are less expensive than DIP financing, and that the retailer should look to be sold first before trying to restructure, according to the news outlet

With as much as $4 billion in debt, Neiman Marcus is looking to stay afloat as it temporarily shut down all 43 of its namesake stores as well as its Bergdorf Goodman locations and Last Call stores because of the coronavirus pandemic. The retailer also furloughed the majority of its employees because of the virus.

According to the sources, Neiman Marcus may find a buyer in Sak’s Fifth Avenue owner, Hudson’s Bay, as well as other possible interest groups. It was unclear at the time of writing if Hudson’s Bay was in a position to purchase Neiman Marcus, after going private in March, or if any other parties were interested in purchasing the company.