Neiman Marcus expected to file for bankruptcy, lenders say

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Friday, April 24, 2020

NEW YORK CITY -- Neiman Marcus is expected to file for bankruptcy Sunday, according to the luxury retail brand's lenders.

It's unclear what the company will enter into bankruptcy trying to achieve.

Right now, all of the company's stores are closed due to the coronavirus pandemic and most of its 14,000 employees are furloughed.

On Wednesday, Neiman Marcus missed an interest payment of $72 million on bonds owed in 2024, and now its bond holders have the right to file a lawsuit against the company and force bankruptcy.

The company's lenders say a possible bankruptcy has been in motion since 2018 when the company's two asset holders, Ares Management Corp. and the Canada Pension Plan Investment Board, moved the most valuable asset in the Neiman Marcus Group portfolio to another entity, leaving the company with no sustainable assets.

The lenders have filed a lawsuit claiming the move was illegal and that the company's asset holders committed fraudulent conveyance.

The company operates 42 Neiman Marcus stores across the United States, including at Hudson Yards on Manhattan's West Side, as well as Bergdorf Goodman on Fifth Avenue.