Settlement may cost Sycamore, KKR US$470m
NEW YORK: Independent directors of Nine West Holdings Inc proposed that Sycamore Partners LLC and a unit of KKR & Co pay US$470 million (RM1.95 billion) to settle potential suits stemming from Sycamore’s 2014 leveraged buyout of the nowbankrupt shoe retailer.
An ad hoc group of unsecured creditors that had been negotiating with Nine West disclosed the offer by the independent board members in bankruptcy court papers on Monday.
The group, which includes Aurelius Capital Management LP, Contrarian Capital Management LLC, Paloma Partners Management Co and Centerbridge Partners LP, was negotiating with Nine West’s owners for about a month before the discussions stalled, the filings showed.
The filing didn’t detail what potential suits could be brought against KKR and Sycamore for their roles in the company’s financial woes.
Talks between the parties would resume, said the group, which was working with TRS Advisors LLC, the firm founded by Todd Snyder after he left Rothschild Inc’s restructuring practice last year, and Wilmer Cutler Pickering Hale & Dorr LLP is serving as counsel.
The group’s most recent proposal included a US$40 million rights offering that would involve convertible preferred equity and be backstopped by certain holders of 2019 and 2034 notes, according to separate documents reviewed by Bloomberg.
The official committee of unsecured creditors received court permission last month to expedite a probe into the 2014 leveraged buyout of Nine West, which a KKR unit helped finance.
To pay for the purchase, Sycamore issued debt through Nine West and then bought three of the subsidiaries for its own direct ownership, at what the group’s lawyers said was a belowmarket price. KKR also ended up with an equity stake.