According to sources, debt-stricken Neiman Marcus Group is preparing to seek bankruptcy protection following the forced closures of its luxury department stores in the U.S. after narrowly being spared from bankruptcy last year.
Up until this week, Neiman had received multiple inquiries from creditors regarding its next moves amid the closings and current state of affairs. This week, the group proceeded with holding confidential discussions with bondholders regarding possible financing that would assist the struggling retailer with continuing to operate while under bankruptcy protection, the sources close to the situation claimed. In addition, the company has also had similar discussions with its lenders in recent days, one of the sources added.
Sources, who asked not to be identified in the confidential matter, added that creditors could potentially give Neiman additional time to make upcoming debt payments that are due this month while restructuring discussions continue. This could result in a transaction that will rework financial obligations outside of bankruptcy proceedings. Last month, the company said it would be “evaluating all courses of action to preserve our financial strength” because of the Coronavirus pandemic.
According to Reuters, last year Neiman reached a deal with creditors to rework debt in an effort to avoid a bankruptcy filing. However, with the unforeseen outbreak of the Coronavirus, the company had no choice but to close all Neiman, Bergdorf Goodman, and Last Call stores through the end of April, furloughing the majority of its 14,000 employees. As a result of the closures, the company has found itself in a large bind as they are still expected to pay interest payments on portions of its more than $4 billion of debt, which are due beginning April 15th.
Neiman has declined to comment on this latest development.
