A federal judge has rejected Amazon.com Inc.’s initial challenge to Saks Global Enterprises’ Chapter 11 filing, approving short-term financing for the bankruptcy.
Amazon presented its case against Saks Global’s bankruptcy financing on Thursday, claiming that the department store “burned through hundreds of millions of dollars in less than a year” and failed to fulfill its obligations under a $475 million agreement.
The legal battle ensues after Amazon’s hefty investment when Saks purchased Neiman Marcus for $2.7 billion in December 2024. The online giant committed $475 million to the deal, believing that Neiman Marcus would begin selling its products on Amazon’s website and that Amazon would provide technology and logistics support.
Amazon alleged that the luxury retailer violated an agreement to sell Saks products online and stated that its equity stake in the now-bankrupt company is “presumptively worthless.” Following a late-night, 7.5-hour court session, Saks gained access to approximately $400 million in cash but will need to return to court in the coming weeks to obtain final approval for the full $1.75 billion financing package.
Amazon’s attorneys wrote, “Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners.”
Following the ruling, Amazon warned it might pursue “more drastic remedies” if Saks fails to address its concerns. It may also join other creditors opposing the financing to convince US Bankruptcy Judge Alfredo Perez to nullify or alter the debt agreement.
Saks advisers stated that the retailer was at risk of liquidation without quick access to funding.
By CEO NA Editorial Staff
