Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - Amazon.com, Inc. is openly fighting Saks Global Enterprises' bankruptcy financing plan in court. The tech giant has declared that its equity investment in the luxury retailer is now "presumptively worthless."
In court documents filed late Wednesday, Amazon alleged that Saks breached their agreement regarding product sales on its e-commerce platform. Amazon is pushing back against a new $1.75 billion financing scheme, arguing it would severely harm unsecured creditors like themselves.
Key Takeaways
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Amazon states its $475 million equity investment in Saks is effectively zero.
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Saks is accused of breaching the "Saks on Amazon" launch deal and missing budget targets.
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The judge approved emergency funding despite Amazon's objection to prevent total liquidation.
Amazon previously injected $475 million in 2024 to help facilitate Saks' acquisition of Neiman Marcus. This strategic investment came with strings attached: the launch of "Saks on Amazon" and guaranteed payments of $900 million over eight years.
According to the filing, Amazon claims Saks failed to meet its budgets and burned through hundreds of millions of dollars in less than a year. Amazon argues that poor financial management has led to a massive pile-up of unpaid invoices to retail partners.
Risk of Liquidation
On the flip side, Saks' advisors testified that the company faces total liquidation if it doesn't get immediate access to fresh cash. Mark Weinsten, Saks' Chief Restructuring Officer, bluntly stated the company would be "dead in the water" without financing to pay vendors and payroll.
US Bankruptcy Judge Alfredo Perez ultimately allowed Saks to draw an initial $400 million to keep operations running. This decision was made despite Amazon's argument that the financing would saddle Saks with massive new debt obligations.
This legal battle highlights the friction in Amazon's strategy to expand its physical retail footprint through partnerships. For investors, this souring deal serves as a crucial note when evaluating the company's capital allocation in the traditional retail sector.
Reference:
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Bloomberg, Amazon Blasts Saks Funding Deal, Says Equity Is ‘Worthless’. Diakses pada 15 Januari 2026
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