businessRetail

Neiman Marcus moves closer to its bankruptcy exit

Disputes over executive retention pay and an asset transfer have been resolved, and Neiman Marcus could exit Chapter 11 before Christmas.

Neiman Marcus’ bankruptcy scaled a couple of milestones Thursday, and executives are getting a raise after all.

The Dallas-based luxury retailer is on schedule to have its business plan approved in September and emerge from Chapter 11 by early December.

That timetable was firmed up with the conditional approval Thursday of a lengthy set of documents that include Neiman Marcus’ business plan and a settlement in the dispute over the transfer of its Munich-based MyTheresa business.

U.S. Bankruptcy Judge David Jones is expected to sign off on the plan next week, and he also approved big raises for CEO Geoffroy van Raemdonck, seven additional top executives and as many as 239 key employees.

In approving the salaries, Jones overruled the bankruptcy court’s trustee, who serves as a watchdog in such a case and who formally opposed the “pay to stay” compensation. The additional pay for the top executives is capped at $9.95 million, including $6 million for van Raemdonck.

Separately, $8.7 million in additional pay was approved for 239 employees, including senior vice presidents, vice presidents and other key employees.

Neiman Marcus’ creditors and lenders didn’t oppose the pay increases. “The parties that will bear the cost of this support it,” Jones said, adding that he was approving the salaries “to maximize the opportunity for success and retain the best and the brightest in an environment that we don’t understand one day to the next.”

The retention and performance-based compensation plan was filed several weeks ago, but Jones delayed it, asking for more “context” about what he said is a complicated case.

Three metrics that were put in place to justify the extra pay were met and exceeded, according to testimony during the Thursday hearing from Mark Weinsten, chief restructuring officer of Neiman Marcus Group.

The dispute over the transfer of MyTheresa to Neiman Marcus former shareholders Ares Management and the Canada Pension Plan Investment Board was resolved with the creditors committee. Shares of MyTheresa will be returned to the pool of assets that will be used to help pay creditors. The total value of the settlement wasn’t disclosed, but it includes 140 million shares of MyTheresa and $10 million in cash.

Neiman Marcus said late Thursday that it is “pleased that a global settlement was reached regarding the MyTheresa claims.”

An ongoing dispute could have held up its disclosure statement, which includes its business plan.

“The settlement resulted in the approval of the disclosure statement and adds significant certainty to the restructuring process, and we continue to target early fall 2020 for emergence from bankruptcy,” Neiman Marcus said in a statement.

Twitter: @MariaHalkias

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Maria Halkias, Staff writer. Maria Halkias has covered the retail scene for The Dallas Morning News since 1993.

mhalkias@dallasnews.com /maria.halkias @MariaHalkias Instagram Iconmariahalkias LinkedIn Iconhttps://www.linkedin.com/in/MariaHalkias
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