Neiman Marcus Group Inc. denied violating the terms of a loan from top-ranking lender Deutsche Bank AG, saying it has $100 million more cash on hand than projected because sales have been better than expected, WSJ Pro Bankruptcy reported. Deutsche Bank, in court papers filed Friday, said the bankrupt retailer breached the terms of a $760 million loan by overvaluing the inventory backing the asset-based loan. Neiman said in response that generating more cash than expected has, in turn, lowered the level of inventories backing the Deutsche Bank loan. The company said it would use cash to replenish inventory back to levels required under the loan. Deutsche Bank on Friday raised concerns about allowing Neiman to continue to have access to the loan financing unless the luxury retailer replenishes a cash collateral reserve meant to protect the bank and other lenders against losses, according to the bank’s court filings. Neiman Marcus filed for bankruptcy in early May with a $675 million bankruptcy loan from large creditors, including Pacific Investment Management Co., Davidson Kempner Capital Management LP and Sixth Street Partners LLC. The company, however, is also relying on a deal with Deutsche Bank and other asset-backed lenders — holders of Neiman’s most senior debt — to use their cash to fund its business during the chapter 11 case.
