One of Neiman Marcus Group Ltd.’s debtholder believes the company could be in default based on a transaction involving the Canada Pension Plan Investment Board.

Marble Ridge Capital LP, which is invested in some of the group’s debt, namely its 8.75 per cent senior notes and term loans, sent a letter last week expressing serious concern over the transfer of the group’s MyTheresa business, a women’s luxury clothing and accessory brand.

Read: To shop or drop: Retail investing in the wake of Sears’ demise

The transfer of the business into the hands of the CPPIB and Ares Management takes it out of reach of debtholders like Marble Ridge, which is why it expressed concern in the letter at the lack of consideration for what the transaction ultimately means for the status of Neiman Marcus.

Marble Ridge believes Neiman Marcus was either insolvent at the time of the transfer or the transfer itself rendered the company insolvent, according to the letter.

“To me, it’s sad the CPPIB would be stealing assets out of this business when really it should be looking to grow the business for the long term,” says Dan Kamensky, managing partner of Marble Ridge. He suggests the sale of the MyTheresa business, as well as real estate owned by Neiman Marcus, would be the better option and would benefit all stakeholders in the company.

The CPPIB jointly acquired the group with Ares in 2013. The retailer was poised to make an initial public offering in 2015, but the plan eventually fell through. When reached for comment, a spokesperson for the CPPIB said the pension fund currently has no comment on the matter.

Read: CPPIB completes Neiman Marcus purchase

Copyright © 2019 Transcontinental Media G.P. Originally published on

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