SAKS, SIMON SETTLE: While Saks Global went into bankruptcy in January with plenty of bumps, the ride is getting smoother.
Federal bankruptcy judge Alfredo Pérez in Houston signed off on the company’s settlement with Simon Property Group on Monday, clearing the way for the retailer to push ahead on good terms with its largest landlord.
Just before Saks Global filed for bankruptcy on Jan. 13, Simon moved to terminate and reclaim two leases — one for the Neiman Marcus store in the Stanford Shopping Center and another lease at the Woodbury Common Premium Outlets.
That led to a series of talks between the two sides.
“To say that this is a hard-fought negotiation is quite an understatement, but I’m happy to report that we were able to reach resolution,” said Allyson Smith, the Willkie Farr & Gallagher attorney representing Saks Global, at the hearing.
The details of the settlement were deemed to be “commercially sensitive,” but Smith said the deal did allow for the “the assumption of 29 leases, seven of which are on amended terms and termination of 34 leases.”
Saks Global is closing about half of its Saks Fifth Avenue chain and most of its Saks Off 5th doors during bankruptcy and plans to exit this summer.
“In addition to resolving the pending termination litigation, [the settlement] also preserves the relationship with Saks’ largest landlord, as a result of the amendments the go forward lease portfolio better aligns with the go forward business plan.
“It includes restructured economic terms, including certain capital expenditure contributions as well as certain amended lease durations,” she said.
Pérez said it was an appropriate exercise of the retailer’s business judgment that resolves “a potential significant roadblock to confirmation, or at least confirmation with the business plan that the debtor’s choosing.”
