Berkeley Research Group is serving as financial advisor, Kirkland & Ellis is serving as legal counsel and Lazard is serving as investment banker for Neiman Marcus Group, which entered into a restructuring support agreement with a significant majority of its creditors to undergo a financial restructuring, substantially reducing its debt load and interest payments and supporting continued operations during the COVID-19 pandemic and beyond. The binding agreement with holders represents more than two-thirds of the company’s outstanding debt.
To implement the restructuring agreement, Neiman Marcus Group commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. As part of the process, Neiman Marcus Group secured debtor-in-possession financing of $675 million from creditors to enable business continuity throughout proceedings.
Wachtell, Lipton, Rosen & Katz is serving as legal counsel and Ducera Partners is serving as investment banker for the extended term loan lenders. Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel and Houlihan Lokey is serving as investment banker for the noteholders.
“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth. 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,” Geoffroy van Raemdonck, chairman and CEO of Neiman Marcus Group, said. “My team and I appreciate the partnership and the steadfast support of all our stakeholders and board of directors through this process. The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation. We will emerge a far stronger company. In a world that is changing, we are uniquely positioned to give our brand partners access to our loyal luxury customers like no other company. We will deliver that through the strength of our associate relationships and digital solutions.”
Details on the Restructuring Agreement and Chapter 11 Proceedings
- Certain of the Neiman Marcus Group’s largest creditors committed to fulfill $675 million in DIP financing during the Chapter 11 proceedings.
- These creditors also committed to fulfill a $750 million exit financing package that would fully refinance the DIP financing and provide additional liquidity for the business.
- Upon emergence, Neiman Marcus Group’s planned capital structure is anticipated to be long dated with no near-term maturities and to eliminate approximately $4 billion of its existing debt.
- The transaction is supported by Neiman Marcus Group’s existing shareholders and, pursuant to the agreement, the creditors participating in the restructuring agreement will become the majority owners of the company.
- Prior to the commencement of the Chapter 11 proceedings, new boards of managers were established at two debtor entities, Mariposa Intermediate Holdings and Neiman Marcus Group, to lead the debtors through the restructuring process. Each board of managers is chaired by van Raemdonck and includes at least one independent manager.
- Neiman Marcus Group expects to emerge from the process in early fall 2020.
- Mytheresa is not a part of the Chapter 11 proceedings and will continue to operate independently.
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Neiman Marcus Group is an omni-channel fashion retailer conducting integrated store and online operations under the Neiman Marcus, Bergdorf Goodman, Neiman Marcus Last Call and Horchow brand names.
