Nine West Holdings Inc. could face an uphill battle gaining court approval of a settlement of potential lawsuits against private-equity owner Sycamore Partners LP for $105 million in cash, lawyers for junior creditors said at a court hearing yesterday, WSJ Pro Bankruptcy reported. Rolled out shortly after creditors unveiled a proposed $1 billion lawsuit against Sycamore, the Nine West settlement “is a one-handed handshake,” White & Case lawyer Christopher Shore told Judge Shelley Chapman at a hearing in the U.S. Bankruptcy Court in New York. David Golden, lawyer for the official committee of unsecured creditors, called the $105 million offer “measly,” when contrasted to the strength of the claims against private equity owners. The dispute erupted as the shoe and accessory seller rushes to get out of bankruptcy with a chapter 11 plan that hands ownership to investors in the company’s unsecured term loans. Judge Chapman commented that the proposed Sycamore settlement could be “DOA,” or dead on arrival, in light of the protests from creditors that don’t support it. She sent Nine West and its creditors to mediation, in hopes of avoiding a major court clash that the company can’t afford.
