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Nine West Holdings – Unsecured Creditors Objects to Disclosure Statement, “Paltry” Settlement with, and Favorable Treatment of, Sycamore Partners

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November 9, 2018 – The Official Committee of Unsecured Creditors filed an objection [Docket No. 833] to Nine West Holdings’ Disclosure Statement [Docket No.783]. The Committee asserts, “The Committee has grave concerns regarding the Plan and the purported settlements contained therein. The Committee believes that rather than allocating the Debtors’ assets in accordance with the Bankruptcy Code, the Plan and its purported settlements unlawfully favor the Debtors’ equity sponsor, Sycamore, and the Unsecured Term Loan Lenders, who are the only unsecured creditors who support the Plan. Indeed, the Plan settles NWHI claims against Sycamore and related parties that could be worth well in excess of $1 billion for a paltry fraction of that value, and provides for a distribution scheme that unreasonably favors the Unsecured Term Loan Lenders at nearly every turn. The result is a Plan that meaningfully prejudices NWHI’s unsecured bond and trade creditors, who hold more than $900 million of claims at NWHI, and the unsecured trade creditors at the Debtors’ operating subsidiaries (collectively, the ‘Unsecured Bond and Trade Creditors’). The Committee’s concerns are compounded by the Disclosure Statement, which, in the Committee’s view, misstates and/or mischaracterizes several of the primary facts presented by the Debtors as weighing in favor of the Plan.”

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