Kirkland, Wachtell, Paul Weiss Land Roles in Neiman Marcus Bankruptcy
The department store is the second large retailer to file for Chapter 11 protection this week, as the coronavirus pandemic deals a fatal blow to already struggling companies.
May 07, 2020 at 12:10 PM
3 minute read
Neiman Marcus. Photo: Sundry Photography/Shutterstock.com
Luxury retailer Neiman Marcus filed for bankruptcy protection Thursday morning, the first major department store to buckle under the weight of the coronavirus pandemic.
In its Chapter 11 petition filed in the Southern District of Texas, Neiman Marcus said it owes about $4 billion to between 50,000-100,000 creditors. The retailer tapped Kirkland & Ellis, led by Matthew Fagen, Anup Sathy and Chad Husnick, as debtor's co-counsel. Local shop Jackson Walker, led by Matthew Cavenaugh, Jennifer Wertz, Kristhy Peguero and Veronica Polnick, will also provide legal counsel.
The company has entered an agreement with its creditors, Neiman Marcus said Thursday, and it has received $675 million of debtor-in-possession financing. The creditors also committed to a $750 million exit financing package, and Neiman Marcus said expects to emerge from restructuring in the fall. The company's investment banker is Lazard, and Berkeley Research Group is its financial adviser.
As part of the finance deal, the extended-term loan lenders are represented by Wachtell, Lipton, Rosen & Katz, and Ducera Partners is their investment banker. Paul, Weiss, Rifkind, Wharton & Garrison is representing the noteholders, and Houlihan Lokey is their investment banker. Latham & Watkins is representing the non-debtor parent, Neiman Marcus Group, Inc.
Neiman Marcus' filing comes just days after fellow retailer J. Crew sought bankruptcy protection. The coronavirus pandemic has largely shuttered the economy and forced physical storefronts to close, spelling doom for retailers that were already struggling and accelerating the timeline of a new wave of restructurings—many bankruptcy practices have been preparing for this to happen.
A handful of Big Law firms have emerged as the early beneficiaries of retailers' struggles.
Kirkland, which is representing Neiman Marcus, has stepped in as counsel for multiple debt-saddled companies in recent weeks. The firm, which also navigated the restructuring of retailers such as Forever 21, FullBeauty Brands, Things Remembered, Destination Maternity, Pier 1 Imports and Toys "R" Us, is also reportedly working with Macy's and J.C. Penney.
The firm is no stranger to working with luxury retailers, either; Kirkland is also handling the chapter 11 proceedings of Barney's New York, the high-end department store once ubiquitous with trendsetting Manhattanites that fell into financial peril months before the coronavirus pandemic.
Read More
As Coronavirus Ravages the Economy, Bankruptcy Attorneys Prepare for the Flood
Ravaged by Coronavirus Economy, Debt-Saddled Companies Turn to Kirkland
Barneys Taps Kirkland, Katten for Chapter 11 as Retailers' Woes Continue
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