The luxury department store chain Neiman Marcus Group announced that it has received interim approval from the U.S. Bankruptcy Court in Houston for all of the first day motions related to its voluntary Chapter 11 proceedings filed on 7th May, 2020.
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The court has approved Neiman Marcus Group’s access to debtor-in-possession financing of $675 million from creditors, which will enable business continuity during proceedings. The court has also approved motions that support continued operations, including authorizing the company to continue to pay employee wages and benefits and maintain various customer-related programs, including honoring its loyalty programs, gift cards, credit cards, and return policies.
With the access to additional financing approved by the court, the company will honor its commitments with vendors and be well-positioned to pay invoices for goods and services after the company’s filing date under normal payment terms.
Geoffroy van Raemdonck, Chairman and Chief Executive Officer of Neiman Marcus Group stated, “We are pleased to receive court approvals of our first day motions, which provide us with ample liquidity to operate the business and allow our dedicated associates, together with our brand partners, to continue providing magical experiences to our loyal luxury customers. This will ensure both our short-term and long-term success as a relationship and digital leader in luxury retail.”
“We thank all our extraordinary associates for their unwavering commitment to Neiman Marcus Group during these unprecedented times. Every day I am inspired by their continued efforts to go above and beyond to delight our customers, our communities, and each other with the love and care that is unique to us,” continued Mr. van Raemdonck.
On 7th May, 2020, the company announced that it entered into a binding Restructuring Support Agreement with holders representing over two-thirds of the company’s outstanding debt. The RSA includes commitments from holders of over 77% of the Debtors’ Extended Term Loans, over 99% of the Debtors’ Second Lien Notes, and over 69% of the Debtors’ Third Lien Notes to equitize their debt and to backstop the full amount of the proposed $675 million DIP financing facility and a $750 million exit financing facility.
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Upon emergence, the company’s planned capital structure is anticipated to be long-dated with no near-term maturities and to eliminate approximately $4 billion of its existing debt. To implement the RSA, the company has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court.