Saks Global is eyeing filing for bankruptcy in the Southern District of Texas, bringing yet another high-profile case to the Houston court’s docket, said three sources familiar with the matter.

The district has emerged as a top destination for complex bankruptcy filings in recent years, with First Brands Group, Office Properties Income Trust and Pine Gate Renewables among the major cases currently on the docket of Judge Christopher M. Lopez. A second judge on the bench, Alfredo Perez, has been ramping up since his appointment in 2024.

Best known for its flagship store on 5th Avenue in New York City, Saks built deep ties to Texas through its late 2024 merger with rival luxury department store chain Neiman Marcus, which opened its first store in Dallas in 1907 and filed for bankruptcy in Houston nearly six years ago.

Saks is now expected to file bankruptcy in the coming weeks after skipping an over USD 100m coupon payment on its 11% senior secured notes last week, the sources said. The company has been looking to secure a debtor-in-possession (DIP) loan to keep the business running during its bankruptcy, as reported.

Saks has valuable stores and intellectual property to support a DIP loan, but the assets’ value hinges on the stores remaining operational, said a fourth source familiar with the matter.

A group of noteholders has been looking at providing USD 750m of fresh capital alongside a roll-up of a portion of existing debt, bringing the DIP loan to USD 1bn, according to Bloomberg. Saks’ lead ABL credit facility lender Bank of America has a history of stepping up to provide bankruptcy financing to retailers.

Saks likely needs significant capital to pay vendors to keep its shelves stocked and pay administrative expenses, said a sector advisor. The company also faces substantial customer refund payments, according to a report in Puck.

While the Saks and Neiman Marcus deal was intended to unlock significant cost savings and liquidity, it has proved disastrous for noteholders that financed the merger along with vendors who patiently gave the company time to turn around its operations.

“This is one of the uglier non-fraud situations that I have ever seen,” a trader said. “(It’s) just so quick and nasty.”

Vendor frustration with Saks has been growing as the company repeatedly misses payments for goods and fails to meet its own deadlines to catch up, as reported.

Premier factoring provider Hilldun Corp CEO Gary Wassner told Debtwire that he has not received a payment from Saks since 19 December.

Saks returned to the noteholders over the summer to raise USD 600m in fresh liquidity through new first-out senior secured notes issued by affiliate SGUS as part of a liability management exercise that allowed holders to swap their original notes for second and third-out notes, as reported.

The first-out notes traded at 30.50 today (6 January), down sharply from 80 at the start of December, according to MarketAxess. The second-out notes traded at 6.

Saks is working with PJT Partners, BRG, and Willkie Farr, while lenders on its ABL credit facility have tapped Morgan Lewis, Otterbourg, and M3 Partners, as reported. An ad hoc group of the senior secured notes turned to Lazard and Paul Weiss for advice on the summer LME.

Saks did not respond to requests for comment.