Judge denies Amazon’s effort to block Saks Global bankruptcy
Jan. 15 (UPI) — A U.S. bankruptcy judge denied Amazon.com Inc.’s effort to block a proposed financing deal to help Saks Global Enterprises stay in business amid Chapter 11 bankruptcy.
Judge Alfredo Perez on Wednesday night approved an initial $400 million financing lifeline to Saks after a 7.5-hour courtroom battle between Saks and several of its creditors, including Amazon.
Saks officials seek $1.75 billion to stay in business, but they will have to return to the U.S. District & Bankruptcy Court for the Southern District of Texas for further approvals.
Amazon officials and other creditors objected to the proposed bankruptcy financing plan submitted by Saks Global amid the luxury retailer’s financial woes.
Amazon in 2024 invested $475 million in preferred equity to help Saks buy luxury brand Neiman Marcus for $2.65 billion, but Amazon said that investment now is worthless.
Amazon officials also said Saks did not abide by the terms of the investment, which included creating a “Saks on Amazon” account to sell goods on the Amazon retail platform.
The online storefront was to market luxury beauty and fashion goods and pay a fee for Saks-branded items, which was calculated to produce about $900 million in revenues for Amazon over eight years.
“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,” Amazon said in a court filing.
The new restructuring plan proposed by Saks and partly approved by Perez further endangers Amazon’s investment and those of other creditors by saddling Saks with more debt, Amazon’s attorneys argued.
Attorneys for Saks on Wednesday argued the luxury retailer would go out of business and be liquidated if it could not access at least some of the proposed $1.75 billion rescue loan.