The unsecured creditors committee in the Saks Global bankruptcy is still in the information-gathering stage — and looking to former chief executive officer Marc Metrick for documents related to the company, its relationship with vendors, the $2.7 billion deal to buy Neiman Marcus Group and more.
Metrick, a Saks Fifth Avenue veteran, became the public face of the retailer as it raced to integrate Neiman’s and struggled to stay afloat. He was on hand for many of the key moments of the retailer’s fall and creditors want the details.
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Earlier this month, the creditors issued Metrick a demand for documents under bankruptcy Rule 2004.
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“The committee has asked that Marc Metrick … provide documents in response to the committee’s diligence requests,” the creditors said in a court filing. “Mr. Metrick, through counsel, has thus far refused and indicated that, rather than proceed by written agreement … the committee should file a formal Notice of Rule 2004 Discovery.”
Metrick had been due to respond on Friday, but the two sides met on Wednesday and the deadline to comply with the order was extended to May 26. The former CEO declined to comment when reached by WWD.
He is not alone in this back-and-forth with the committee, which is made up of vendors and partners that were left holding the bag when Saks Global filed for bankruptcy, including Amazon, Chanel Inc., Brookfield Properties Retail Inc., Kering and LVMH Moët Hennessy Louis Vuitton.
The creditors previously put out Rule 2004 requests to Richard Baker, former chairman of the retailer and architect of the Neiman’s deal, and Ian Putnam, who was CEO of Saks Global Properties & Investments.
They both eventually turned over documents, and Putnam sat for an interview, satisfying those requests.
Rule 2004 can be used to uncover specific details or, according to attorneys, facilitate a fishing exhibition for creditors looking to recoup their losses by finding value anywhere they can — including through lawsuits.
The request to Metrick was similar to the demands made to Baker and Putnam and covered the period from Jan. 1, 2022, through when the company filed for bankruptcy on Jan. 13.
Included in the demand is:
- Documents detailing all transfers from the company to Metrick, including “loans, loan forgiveness, dividends, bonuses, consulting fees, distributions, or shares, including any bonus paid to you in connection with the acquisition of the Neiman Marcus Group.”
- All communications with Baker and Putnam.
- All documents related to the Neiman’s deal as well as joint ventures with Authentic Brands Group and Simon Property Group.
- And “all documents and communications between you and any of the debtors’ vendors relating to the debtors.”
Where this all leads — if it leads anywhere — remains to be seen. During negotiations to establish a plan of reorganization, unsecured creditors negotiated with secured lenders and set up a litigation trust, funded with $20 million from the retailer.
While secured lenders are due to own the retailer when it comes out of bankruptcy this summer, what unsecured vendors get will depend on how much the litigation trust turns up, proceeds of which will be shared with secured creditors.
A source close to the process said the investigation is on a kind of “hiatus” until the Chapter 11 process plays out and then the search for money — wherever it can be found — will continue in earnest.