Amazon has officially filed an objection to Saks Global’s Chapter 11 bankruptcy proceedings, drawing a line in the sand over its $475 million preferred equity stake tied to the luxury retailer’s acquisition of Neiman Marcus in late 2024.
In a Jan. 15 court filing, Amazon accused Saks of mismanagement and warned that its investment is now “presumptively worthless,” setting the stage for a contentious bankruptcy battle.
Amazon’s Objection: Equity Now “Worthless”
Amazon invested $475 million in preferred equity as part of Saks Global’s $2.7 billion acquisition of Neiman Marcus, a deal that also involved agreements for online product sales under a “Saks at Amazon” storefront and a guaranteed $900 million in referral fees over eight years.
However, in its objection filed in U.S. Bankruptcy Court in Houston, Amazon argued that Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars, and accumulated significant unpaid debts to vendors and partners — including Amazon itself. As a result, Amazon’s legal team asserted that its preferred equity investment is now “presumptively worthless.”
Dispute Over Bankruptcy Financing
The bankruptcy filing also included a proposed $1.75 billion debtor‑in‑possession (DIP) financing package intended to help Saks Global stay operational during restructuring. Amazon objected to key elements of this plan, contending that Saks improperly planned to use assets — including what Amazon viewed as collateral tied to its investment — to secure financing that could subordinate Amazon’s claims and weaken its recovery prospects.
While a judge did allow Saks to access an initial portion of this financing, Amazon’s filing warned that it may seek more drastic remedies — such as the appointment of a trustee or examiner — if its concerns aren’t addressed as the case progresses.
Saks Global’s Financial Struggles
Saks Global — the holding company for Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, and Saks Off 5th — filed for Chapter 11 amid mounting debt, supplier defaults, and declining luxury demand less than two years after its merger of the iconic department stores.
The retailer secured initial bankruptcy financing to maintain operations and keep stores open, but the loan approval process has highlighted divisions between the company and some of its largest creditors, particularly Amazon.
Wider Implications for Retail Investors and Partners
Amazon’s aggressive stance in the bankruptcy case reflects broader risks associated with strategic retail investments, especially when they’re tethered to volatile segments like luxury department stores struggling to adapt to changing consumer behaviors.
The objection also underscores challenges corporate partners and vendors face when a major retail partner enters bankruptcy — particularly in navigating complex creditor hierarchies and investment recoveries.
Conclusion
Amazon’s objection to Saks Global’s bankruptcy plan — centered on the claim that its $475 million investment has been squandered — adds a high‑profile and potentially litigious layer to Saks’ Chapter 11 proceedings.
As the restructuring unfolds, the dispute between the e‑commerce giant and the luxury retailer will be one of the most closely watched aspects of the bankruptcy, with implications for corporate investments, creditor rights, and the future of luxury retail partnerships.
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