UPDATE: August 12, 2019: In an emailed statement, a Neiman Marcus spokesperson said of the lawsuit filed by UMB Bank: "These allegations are meritless. It's disappointing that these debtholders chose to assert claims through the trustee that are nearly identical to those already dismissed by a Texas court with prejudice, rather than join the overwhelmingly successful exchange offer that the Company achieved with the vast majority of its debtholders. As has been demonstrated time and again, the exchange and MyTheresa transactions fully complied with the Company's debt documents. The Company intends to vigorously defend itself."

Dive Brief:

• Neiman Marcus and its private equity owners were sued again last week over last year's corporate transfer of the e-commerce site MyTheresa. Neiman Marcus did not immediately reply to Retail Dive's request for comment.
• This time it was UMB Bank, a trustee for some of Neiman's debtholders, that filed the suit in New York state court. UMB alleged in a complaint filed last week that Neiman, at the direction of Ares Management, seized Neiman's "billion-dollar crown-jewel asset" by transferring MyTheresa ownership to the retailer's corporate parent and private equity owners, and out of the reach of lenders. 
• The complaint goes on to allege that, after the transfer, "Ares sought to tighten its stranglehold over the Company's creditors," by offering creditors some value attached to MyTheresa in exchange for an extension on Neiman's debt and new terms favorable to Neiman and its owners.

Dive Insight:

UMB's suit is the latest salvo in a legal and rhetorical war that started almost immediately after Neiman completed the reorganization of MyTheresa under the Neiman corporate structure. 

That structure, according to UMB, got more complicated after the retailer was acquired in 2013 by Ares and the Canada Pension Plan Investment Board in a multibillion-dollar leveraged buyout. "Upon completing the LBO, the LBO Sponsors established a series of corporate shells in an effort to limit their legal exposure while still retaining control over the enterprise," according to the filing. 

After the buyout, Neiman went on to acquire MyTheresa, the digital arm of Munich luxury retailer Theresa, which at the time of Neiman's purchase of it was shipping to 120 countries and was later valued by Goldman Sachs at $1 billion, according to the lawsuit. Neiman this year began considering a sale of the e-commerce unit. 

MyTheresa's transfer all took place on paper, but its effect, according to the UMB suit, was to move it under Neiman's ultimate corporate parent via a series of intra-company dividends, essentially giving the parent the asset for free and sheltering it from creditor claims. UMB alleges the transfer amounted to a fraudulent conveyance of an asset.  

"As the Company was insolvent even before the MyTheresa Subsidiaries were transferred out of it, the Unsecured Noteholders have been stripped of the one key asset that could have mitigated the dire impact of default," UMB alleged in its suit.

The reshuffling of MyTheresa has already prompted one lawsuit and a fierce battle of public statements between Neiman and another lender, hedge fund Marble Ridge Capital. That suit, filed in Texas, was dismissed in March over a lack of subject matter jurisdiction. Neiman maintained throughout that its actions were proper and in December 2018 filed a countersuit against Marble Ridge for what it said were false statements about the company. 

One reason creditors are fighting so hard over MyTheresa is that Neiman's default risk has been high for years, thanks largely to the debt load leftover from its buyout. That debt has eaten up operating profits at the retailer even in periods of relatively strong sales.