Saks gets OK for $400m in rescue funds

A US bankruptcy judge on Wednesday granted initial approval of Saks Global's bankruptcy financing, allowing the company to draw on $400 million in new cash despite an objection from Saks’ estranged business partner Amazon.com.

- DIETRICH KNAUTH

US Bankruptcy Judge Alfredo Perez approved the financing at a court hearing in Houston, saying the money would give Saks a chance to stabilise its business and restructure its debt. Saks’ chief restructuring officer Mark Weinstein said during the hearing that the company would be “dead in the water” without the new money, which would be used to pay vendors and the company’s 17,000 employees.

The luxury retail company filed for bankruptcy late Tuesday with $3.4 billion in debt, after its ill-fated merger with Neiman Marcus caused cash shortfalls that prevented Saks from reliably replenishing inventory at its stores.

Saks Global’s attorney, Debra Sinclair, said all the stores remain “open for business,’ and that Saks has no concern about weakening customer demand.