Saks Global Accuses Lender of Contributing to Hudson's Bay Demise in Lawsuit

Saks Global accuses lender Pathlight Capital of contributing to Hudson's Bay's demise by frustrating its CCAA proceedings and forcing a near-total liquidation. The letter filed in a New York lawsuit states that Pathlight's intransigence further exacerbated the situation, leading to the decision to sell off all merchandise at its 80 stores and 16 under the Saks name. Saks Global was formed last year when Hudson's Bay purchased Neiman Marcus and Bergdorf Goodman and spun them out with its existing Saks Fifth Avenue.

Saks Global, the U.S. company formed last year when Hudson’s Bay purchased Neiman Marcus and Bergdorf Goodman, has accused its lender, Pathlight Capital LP, of contributing to the demise of Hudson’s Bay. In a New York lawsuit, Saks Global alleges that Pathlight’s intransigence frustrated the Canadian retailer’s restructuring proceedings under the Companies’ Creditors Arrangement Act (CCAA), ultimately leading to a near-total liquidation of Hudson’s Bay’s assets [1].

The lawsuit, filed on March 26, states that Pathlight’s actions and inactions directly hindered Hudson’s Bay’s ability to secure much-needed financing. As a result, Hudson’s Bay was forced to initiate CCAA proceedings in Canada, which eventually led to the announcement of a near-total liquidation on March 21, 2025 [2]. Saks Global’s chief legal officer, Andrew Woodworth, wrote in the letter that Pathlight’s ongoing intransigence frustrated the proceedings and contributed to Hudson’s Bay’s inability to secure refinancing [3].

Pathlight Capital LP has responded to Saks Global’s allegations, stating that Pathlight’s actions were in good faith and that Saks Global is obligated to pay the remaining $8.8 million in fees [4]. The lawsuit comes at a delicate time for Saks Global, which is facing significant financial challenges, including an upcoming $120 million interest payment on June 30 and the need to start paying vendors for new shipments [4].

The complex transaction that led to the formation of Saks Global involved Pathlight Capital LP restructuring Hudson’s Bay’s debt and releasing Saks Global from its obligations under a loan. In return, Saks Global agreed to make payments to Pathlight, but the payments were not made as per the agreement, leading to the current lawsuit [2].

The lawsuit and the ongoing liquidation of Hudson’s Bay highlight the complex financial dynamics and potential risks involved in large-scale retail acquisitions and restructurings. As the case proceeds, it will be crucial to monitor the developments and their potential impact on the financial health of Saks Global and the broader retail sector.

References:
[1] https://financialpost.com/pmn/u-s-court-case-sees-saks-global-accuse-lender-of-contributing-to-bays-demise
[2] https://finance.yahoo.com/news/lender-pathlight-sues-saks-clearing-195803763.html
[3] https://ca.finance.yahoo.com/news/u-court-case-sees-saks-195710389.html
[4] https://www.theglobeandmail.com/business/article-hudsons-bay-saks-sues-repayment-fees/