The judge overseeing a lawsuit against Neiman Marcus Group has dismissed claims made by distressed hedge fund Marble Ridge that the retailer’s transfer of its MyTheresa asset to a subsidiary outside of creditors’ reach violated the terms of its indenture.
Judge Tonya Parker cited a “lack of subject matter jurisdiction,” according to a court document filed in Dallas, siding with Neiman's argument that Marble Ridge lacked standing to assert their claim.
“[Marble Ridge] Master Fund is not a creditor of Neiman Marcus based on its alleged holdings of term loans because it is not a lender under Neiman Marcus’ Term Loan Agreement,” Neiman counsel Mike Lynn of Lynn Pinker Cox Hurst argued in the defendants plea to the jurisdiction in December.
To prove an action for fraudulent transfer, Master Fund must be a creditor, the defendants argued. “Marble Ridge Plaintiffs lack standing to bring the claims asserted in their original petition,” Lynn said.
The order dismisses all of Marble Ridge’s complaints without prejudice.
“From the beginning, we have said Marble Ridge’s lawsuit lacked merit. We are pleased that the Court has fully vindicated our position and dismissed all of Marble Ridge’s claims with prejudice,” Neiman Marcus said in an emailed statement to LCD.
The Dallas-based retailer is currently in talks with creditors on an out-of-court restructuring that would give the company a three-year runway on its term loans and unsecured notes to implement its turnaround plan. While the deal would return an equity stake in the luxury fashion brand MyTheresa, 50% would remain out of the reach of creditors in case of a default, Marble Ridge argued.
For further coverage of the proposed restructuring see “Marble Ridge says Neiman Marcus revamp a 'devil's bargain'," LCD News, March 4, 2018, and “Neiman Marcus restructuring sees MyTheresa stake for noteholders," LCD News, March 1, 2019.
The case is Marble Ridge Capital LP v. Neiman Marcus Group Inc., DC-18-18371, in the District Court of Dallas County, Texas. A hearing on Neiman Marcus Group's defamation case against Marble Ridge is still scheduled for 9 a.m. on March 21.
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