A money manager atMarble Ridge Capital LP said he erred inNeiman Marcus Group Inc.’s bankruptcy case after a federal watchdog accused him of misconduct that threatened the retailer’s plan of reorganization.
The hedge fund’s managing partner Dan Kamensky said he made a “grave mistake” in a statement to the U.S. Department of Justice and investment bankers atJefferies Financial Group Inc. Kamensky’s firm and Jefferies were both vying to buy shares of the retailer’s valuable MyTheresa unit from creditors.
“Stand DOWN,” Kamensky wrote to an unidentified Jefferies executive over instant message, according to a report submitted by U.S. Trustee Henry Hobbs. “DO NOT SEND IN A BID.”
Kamensky later told the U.S. Trustee, a bankruptcy court watchdog, that his messages were “motivated by panic” for fear the Jefferies bid would interfere with his own proposal for the shares, according to the statement, which was filed in court papers. He then said that contacting and “trying to influence a potential rival bidder for property of the bankruptcy estate was wholly inappropriate.”
A representative for Marble Ridge declined to comment on the report. Neiman Marcus wasn’t immediately available to comment.
Kamensky said he had been trying to buy the shares for several years and amassed $3.5 million in legal fees. Both his firm and Jefferies have active bids which are still being reviewed by Neiman’s committee of unsecured creditors. The court hasn’t yet taken any formal action against Kamensky, and the Trustee asked the judge to consider what “remedial measures” are appropriate given the findings of the investigation.
The altercation came to light in recent weeks when U.S. Bankruptcy Judge David R. Jones, who is overseeing the reorganization of Neiman Marcus, asked the U.S. Trustee toinvestigate Kamensky’s actions while he served on an official committee of unsecured creditors. Earlier this month, Marble Ridge said in court papers that Kamensky didn’t try to interfere with a potential Jefferies bid for the shares.
The inquiry is at the center of the bankrupt retailer’s plan to give the unsecured creditors equity in MyTheresa to resolve claims against the chain’s private equity owners. Neiman filed for bankruptcy in May and is seeking to cut its debt load by handing control to senior lenders.
The case is Neiman Marcus Group Ltd. LLC, 20-32519, U.S. Bankruptcy Court, Southern District of Texas (Houston).
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