Updated 12:42 a.m. ET Jan. 15
Judge Alfredo Perez, who’s overseeing the Saks Global bankruptcy in Houston federal court, approved the retailer’s $1.75 billion debtor-in-possession loan over the objections of Amazon and some brands in a marathon seven-and-a-half hour hearing Thursday.
Through it all, one thing became very clear — Amazon is among the parties that feel they’ve been ripped off by Saks Global and its march into bankruptcy.
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The web giant, which has been working to build in luxury for years, was once a key backer.
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It invested $475 million into the retailer when it bought Neiman Marcus Group and signed a commercial agreement that promised it $900 million in fees over eight years for hosting the Saks shop on its platform.
But as 2025 wore on and Saks Global started to run into liquidity problems in the wake of the Neiman’s deal, things started to sour.
Saks Global pushed through a refinancing and a deal to bring in $600 million in more debt over the summer that Amazon never consented to.
And when the retailer came to bankruptcy court on Wednesday with the DIP financing, Amazon cried foul on the deal and sought to delay the package, which would fund the retailer as it is in bankruptcy.
In court papers and during the company’s first-day hearing, Amazon’s attorneys said that the DIP financing was secured in part by an entity holding the Saks Fifth Avenue store, even though the famed flagship was promised to secure the web giant’s own interests.
At the hearing, Mark Weinsten, the retailer’s chief restructuring officer, said that he believed that the DIP financing and its collateral were appropriate and necessary, adding that the company has $30 million to $35 million in bills due on Thursday alone and would likely run out of money completely this week if the financing were not approved.
Amazon’s lawyers sent a letter to Saks Global on Jan. 9 asserting its rights, decrying the retailer for mismanagement and offering to provide a separate DIP lending package for the Saks Fifth Avenue HoldCo II, which sits atop the flagship in the corporate hierarchy.
Weinsten said he didn’t see the offer for a separate DIP in a letter shortly before a bankruptcy filing as a fully fleshed out proposal.
Amazon said the financing Saks Global lined up “would violate Amazon’s consent rights under the LLC agreement and would inflict significant harm upon Amazon and other creditors at HoldCo II, for the sole purpose of advantaging other groups of creditors at other entities… Amazon does not consent to any financing that encumbers HoldCo II or Flagship.”
While Amazon didn’t prevail in court on Thursday, the company is ready to fight.
The letter Amazon sent to Saks Global last week said that “Amazon reserves its rights to pursue all claims arising from the company’s and its management’s misconduct related to the LLC Agreement, in addition to claims arising from the board and management’s conduct in the last year that has led to the degradation of significant value and left the company in such a precarious financial position.”