Amazon Warns of 'Drastic Action' After Saks Bankruptcy, Claims $475M Stake Is Now Worthless

Amazon has formally challenged Saks' proposed bankruptcy restructuring, warning of 'drastic action' if the plan proceeds. The e-commerce giant invested $475 million in Saks’ 2023 acquisition of Neiman Marcus, expecting a strategic retail synergy that has now collapsed amid financial turmoil. Amazon contends the bankruptcy plan erodes the value of its stake by allowing significant debt relief to existing shareholders while reducing recoveries for secured and unsecured creditors. The company’s legal filing asserts that Saks’ reorganization framework fails to provide equitable treatment under Chapter 11 of the U.S. Bankruptcy Code. By restructuring debt without full compensation to creditors, Amazon argues the plan creates a windfall for certain parties at the expense of others who contributed capital under agreed terms. This includes Amazon’s $475 million, which it claims is now effectively uncollectible due to the bankruptcy’s asset allocation strategy. Financial analysts note that Saks’ bankruptcy filing, which includes $3.6 billion in total debt, has triggered widespread investor concern. The company’s reorganization plan proposes to convert $2.1 billion of debt into equity, a move that dilutes existing equity holders—including Amazon—while offering little to no return for unsecured creditors. This structure has prompted legal pushback from multiple stakeholders, with Amazon emerging as the most vocal opponent. Market reaction has been swift: Saks’ stock price plummeted to $0.48 per share following the bankruptcy filing. Amazon’s strong stance could influence court decisions and shape future creditor rights in high-profile retail bankruptcies. The outcome may set a precedent for how significant minority investors are treated in restructuring scenarios involving large, previously stable retail entities.