Amazon has escalated a legal battle with luxury retailer Saks Global Enterprises, warning that its substantial equity stake in the company is effectively worthless. The dispute centers on Saks’ proposed financing plan as part of its Chapter 11 bankruptcy proceedings, which Amazon argues unfairly prioritizes new obligations over existing investors and creditors.
Saks Global, which owns iconic department stores including Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus, filed for bankruptcy after struggling with heavy debt and operational disruptions following its 2024 merger with Neiman Marcus. The retailer sought a financing package valued at nearly $1.75 billion to stabilize operations, pay vendors, and maintain store activity during the restructuring process. An initial $400 million tranche of this funding was approved to provide immediate liquidity.
Amazon, which invested $475 million in preferred equity as part of a strategic partnership to sell Saks products on its platform, has objected to the restructuring plan. In court filings, the company claimed that Saks repeatedly failed to meet performance targets, incurred unpaid obligations, and mismanaged funds, leaving Amazon’s investment deeply at risk. Amazon described its equity stake as “presumptively worthless” under the proposed plan.
Saks’ management argues that the new financing is critical to keeping the company operational. The chief restructuring officer emphasized that without access to funds, the business could face shutdown, threatening thousands of employees and jeopardizing the survival of multiple iconic retail brands.
The dispute highlights tensions common in bankruptcy proceedings where strategic investors, creditors, and management disagree on the path forward. Amazon’s aggressive stance demonstrates its intent to protect shareholder value and assert its position in a complex restructuring. Analysts note that the case underscores broader challenges facing traditional luxury retailers, which must navigate heavy debt, changing consumer habits, and digital competition.
As Saks seeks to reorganize and preserve its brands, the outcome of this legal conflict will have significant implications for stakeholders, including investors, employees, and the future of partnerships between online platforms and traditional retailers.
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