Saks Global has fallen out with Pathlight Capital, which helped clear the way for the luxury retailer’s $2.7 billion acquisition of Neiman Marcus last year, but has now sued the company, claiming it’s still owed $8.8 million in fees.

In turn, Saks alleges that Pathlight’s “lack of good faith” led to the Hudson’s Bay restructuring.

While the money at stake is relatively small, the suit, filed May 21 in New York Supreme Court, comes at a delicate time for Saks, which declined Wednesday to comment on the case. 

The deal to acquire Neiman’s marked the start of Saks’ attempt to reset the U.S. luxury retail scene. The combination has spurred on big changes at both Neiman’s and Saks, generated millions in costs and led to a luxury storefront on Amazon. But vendors have chafed at past-due bills and new, slower payment terms. Bondholders, meanwhile, have soured on debt the company raised just six months ago, trading some of the $2.2 billion in junk bonds used to fund the Neiman’s acquisition down to as low as 38 cents on the dollar.  

The Pathlight suit, which shines a light on how the retail buyout came together last year, is one more moving part and potential expense. 

Pathlight has been a partner to Saks for years, extending it and its former parent company, Hudson’s Bay Co., a senior secured term loan facility in 2020. 

The suit said that Hudson’s Bay and Saks Global requested that Pathlight “restructure the outstanding debt of HBC and…Saks Global,” a switch that was “critical to facilitating the complex purchase-and-spinoff transaction” with Neiman’s. 

In return for amending the credit facility and giving Hudson’s Bay a $65.6 million term loan, Pathlight said Saks agreed to pay it $5 million on Jan. 6. That payment was made. 

But Pathlight said Saks also agreed to pay $4.4 million in March and another $4.4 million in April if its term loans to Hudson’s Bay were not repaid. 

“Pathlight fully performed its obligations,” the suit said. “But the term loans were not repaid; therefore, Saks Global was required to timely pay the second and final installments but has failed to do so.”

The suit includes a March 26 letter from Saks’ chief legal officer Andrew Woodworth to Pathlight refusing to pay the remaining $8.8 million and alleging that the lender tripped up Hudson’s Bay’s efforts to refinance the term loan, which would have gotten the company off the hook for the follow-up payments. 

“Pathlight failed to reasonably support opportunities presented by HBC, and such failure and lack of good faith cooperation has been the direct cause for HBC’s inability to secure this much-needed refinancing. As a result of these actions and inactions by Pathlight, HBC was forced to initiate restructuring proceedings under the Companies’ Creditors Arrangement Act (CCAA) in Canada,” which is akin to bankruptcy. 

“Pathlight’s ongoing intransigence further frustrated HBC’s CCAA proceedings, and, on March 21, 2025, forced HBC to announce a near total liquidation,” Woodworth wrote for Saks. 

“Pathlight has not acted in good faith, has frustrated HBC’s ability to refinance the specified term loan transactions, and has thereby deprived HBC of the opportunity to obtain much-needed financing. Pathlight cannot and should not benefit from its own actions, which deprived HBC of its ability to finance its operations.” 

Pathlight’s managing director Matt Williams shot back the next day and said “Pathlight’s alleged bad-faith dealings with HBC…have no bearing on Saks Global’s obligation to pay the structuring fee.”

Now the two are in court and Saks’ lawyers have promised to respond to the company by July 22. 

In Saks world, that’s a lifetime away. 

In the meantime, the retailer owes bondholders a $120 million interest payment on June 30, needs to start paying vendors for new shipments and also has to start making back payments to brands who were owed money for shipments made over the past two years.