Simon Property Group is asking a bankruptcy court to give it approval to terminate two leases that Saks Global has for stores in its shopping centers — despite the luxury retailer’s pending bankruptcy.
The Indianapolis-based landlord, the biggest mall owner in the United States, alleges that Saks Global is in arrears to the tune of $7 million in rent and other fees. That dispute involves a Neiman Marcus store at the Stanford Shopping Center in Palo Alto, California, and a Saks Off Fifth location at Woodbury Common Premium Outlets in Central Valley, New York.
Saks Global — parent of not only Saks Fifth Avenue but also Neiman Marcus and Saks Off Fifth — filed for Chapter 11 protection Jan. 13. But Simon had sent Saks Global notices of default for allegedly owing rent on the two stores in question Jan. 7, before the bankruptcy filing.
Simon claims it has terminated those two leases and it wants to take possession of the two retail spaces, according to a filing with the bankruptcy court Thursday. The landlord is contesting the legal stay that was automatically triggered by the Chapter 11 filing and is asking the bankruptcy court to let it take over the Neiman Marcus store in California and the Saks Off Fifth space in New York.
In bankruptcy cases, a stay halts creditor collection actions while protecting the debtor’s property, giving it time to manage debt repayment or restructuring.
Simon charges there is an “improper holdover” of the leased premises.
Saks Global and Simon didn’t immediately respond to emails from CoStar News on Friday seeking comment.
But in its filing, Simon asked for a court order “confirming that the leases were terminated” and that the stay “does not prevent Simon from exercising remedies to regain possession of the leased premises.”
Citing prior cases, Simon said in court documents that courts have long “recognized that if a lease is validly terminated prior to the commencement of a bankruptcy case, the lease ‘is not resurrected by the filing of the petition in bankruptcy, and cannot therefore be included among the debtor’s assets.’”
The landlord said that Saks Global is contesting its claims, saying that it was not in default.
In the court documents, Simon also said it invested $100 million to obtain an equity stake when Saks acquired Neiman Marcus Group in December 2024 for $2.7 billion.