• Subscribe
  • Log In
  • Sign up for email updates
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The Texas Lawbook

Free Speech, Due Process and Trial by Jury

  • Appellate
  • Bankruptcy
  • Commercial Litigation
  • Corp. Deal Tracker/M&A
  • GCs/Corp. Legal Depts.
  • Firm Management
  • White-Collar/Regulatory

It’s Official: Neiman Marcus Files for Bankruptcy – Updated

May 7, 2020 Natalie Posgate

After weeks of anticipation, Dallas-based luxury department store Neiman Marcus Group and its affiliated companies have filed for Chapter 11 bankruptcy in Houston federal court.

Lawyers from Kirkland & Ellis and Jackson Walker are handling the restructuring for Neiman Marcus and its affiliates, including Houston Jackson Walker partner Matt Cavenaugh, who serves as lead local counsel. 

Kirkland’s team includes restructuring partners Anup Sathy, Chad Husnick and Matt Fagen from the firm’s Chicago and New York offices.

Corporate partners Michael Chambers and Ryan Maierson of Latham & Watkins’ Houston office are representing Neiman’s parent company, Neiman Marcus Group Inc., which is not a debtor in the bankruptcy. The Latham team also includes Los Angeles restructuring partner Jeff Bjork.

Neiman’s independent managers, Marc Beilinson and Scott Vogel, are being represented by Houston partner Jennifer Hardy and New York partners Todd Cosenza and Brian Lennon of Willkie Farr & Gallagher.

Lazard serves as the company’s investment banker in the restructuring. Berkeley Research Group serves as the financial advisor. 

Sources tell The Texas Lawbook that the individual bankers working on the case include Tyler Cowan at Lazard in Chicago and Bob Duffy at Berkeley Research Group in Boston.

The announcement comes after months of restructuring talks Neiman Marcus was engaged in with its creditors. Kirkland has been leading Neiman Marcus’ restructuring efforts outside of the courthouse as well. 

Neiman Marcus entered its bankruptcy proceeding with a restructuring support agreement that includes $675 million in debtor-in-possession financing that the retailer has secured from creditors to enable its business continuity throughout the proceedings. 

In a company statement, Neiman Marcus cited the COVID-19 pandemic as a large reason for obtaining its restructuring agreement and filing for bankruptcy protection.

“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth,” Neiman Marcus CEO Geoffroy van Raemdonck said in a statement. “We have grown our unrivaled luxury customer base, expanded our industry-leading customer relationships, achieved higher omni-channel penetration, and made meaningful strides in our transformation to become the preeminent luxury customer platform. However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business.” 

“This is what Chapter 11 is for,” Cavenaugh said in an email. “Neiman Marcus is an iconic Texas company and brand. As a Texas-based firm, we are proud to partner with Kirkland & Ellis as Neiman Marcus comes home to navigate these truly historic times.”

The voluntary petition of one of Neiman Marcus’ affiliate companies, NM Nevada Trust, reveals a designer list of creditors: $6 million owed to Chanel, $3 million owed to Gucci,  $2.7 million owed to Dolce and Gabbana, $2.5 million owed to Stuart Weitzman, $2.2 million owed to Christian Louboutin, $2.1 million owed to Yves Saint Laurent and so on. 

Dallas’ NorthPark Mall is also listed as a creditor for its lease at one of the state’s premier shopping havens, where Neiman Marcus has an anchor presence. 

But the retailer’s largest creditor is UMB Bank, with two separate unsecured claims listed for $80.68 million and $56.58 million. 

Porter Hedges partner John Higgins and other lawyers at the Houston-based firm are representing a yet-to-be identified group of unsecured creditors.  

The voluntary petition by NM Nevada Trust and another affiliate, NEMA Beverage Corporation, both list the company’s assets and liabilities ranging between $1 billion and $10 billion.

Some earlier reports expected for Neiman Marcus to file in its backyard of the U.S. Bankruptcy Court of the Northern District of Texas, and others may have anticipated for the filing to happen in the Eastern District of Virginia, a hotbed for retail restructurings where Pier 1 Imports filed earlier this year and J.Crew filed on Monday. But Neiman Marcus ultimately chose the Southern District of Texas, where two judges who are experts in corporate reorganizations are based.

Legal advice for Neiman Marcus’ noteholders is being provided by Paul, Weiss Rifkind, Wharton & Garrison, while their investment banker is Houlihan Lokey’s Surbhi Gupta in New York.

The extended term loan lenders are represented by Wachtell, Lipton, Rosen & Katz as legal counsel and Ducera Partners as investment banker (Brad Meyer in New York).

Neiman’s general counsel is Tracy Preston, who in January was honored with the General Counsel of the Year for a Midsized Legal Department award, which was part of the Association of Corporate Counsel’s DFW Chapter’s annual outstanding corporate counsel awards. 

A large part of Preston’s recognition came from a particularly busy 2019, which included negotiating an out-of-court liability management transaction that achieved a three-year maturity extension of substantially all of Neiman’s funded debt. She also defeated a $1 billion lawsuit brought by a hedge fund related to Neiman’s debt. 

Preston has been signing the bankruptcy paperwork as the authorized representative of Neiman Marcus. 

“She can truly handle anything that is thrown at her,” Kirkland partner Jeffrey Zeiger told The Texas Lawbook earlier this year.  

Claire Poole contributed to this report.

Natalie Posgate

Natalie covers litigation, trials, breaking stories, industry trends, cases and lawyers in the Texas business law community.

View Natalie’s articles

Email Natalie

©2022 The Texas Lawbook.

Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

Primary Sidebar

Recent Stories

  • In a Texas Capital Case, the Supreme Court’s Denial of Cert Bewilders the Appellate Defenders Who Pursued It
  • McDermott Opens in Austin
  • CDT Roundup: 15 Deals, 13 Firms, 146 Lawyers, $6.1B
  • Litigation Roundup: Pizza Hut Franchise Win, Charter Punis Phase Delayed, More Social Media Addiction
  • SCOTX Inks a Bummer for Hempsters

Footer

Who We Are

  • About Us
  • Our Team
  • Contact Us
  • Submit a News Tip

Stay Connected

  • Sign up for email updates
  • Article Submission Guidelines

Our Partners

  • Houston Chronicle
  • Dallas Business Journal
The Texas Lawbook logo

P.O. Box 543455
Grand Prairie, TX 75054

214.232.6783

© Copyright 2022 The Texas Lawbook
The content on this website is protected under federal Copyright laws. Any use without the consent of The Texas Lawbook is prohibited.