Marble Ridge Cash founder admits to Neiman Marcus fraud

Marble Ridge Money founder Dan Kamensky pleaded responsible to fraud, five months after he was charged with abusing his placement on a Neiman Marcus Group Inc. individual bankruptcy committee to obtain property at an artificially small value.

Kamensky, 48, of Roslyn, New York, was charged by federal prosecutors in Manhattan in September with pressuring a rival to abandon a increased bid for Neiman Marcus belongings so Marble Ridge could get them more affordable.

The Dallas-based mostly luxury division retail outlet chain submitted for Chapter 11 personal bankruptcy defense in May possibly and Kamensky was a member of a committee of unsecured collectors.

”Mr. Kamensky has admitted what he did was improper,” his attorney, Joon H. Kim, claimed in an emailed assertion. “He deeply regrets his perform on July 31, 2020 and the terrific suffering it has triggered his relatives, colleagues and some others.”

In accordance to federal sentencing recommendations, Kamensky should get 12 to 18 months in prison, prosecutors stated. Underneath the deal, either side can question for a sentence outside the house the guidelines, even though a decide is not needed to acknowledge any recommendation.

Kamensky, who is absolutely free on bond, is scheduled to be sentenced on May 7. He could confront a fine of as a lot as $55,000. Even in contentious personal bankruptcy situations, wherever collectors and debtors generally exchange charges of bad religion and unfair deal-building, it is rare for felony fees to be submitted.

In a listening to past year right before a individual bankruptcy decide in Houston who referred Kamensky to federal prosecutors, the judge criticized the investor in unusually own language, at one particular place calling him a thief “of the cheapest character.”

A working day after Kamensky’s arrest, the individual bankruptcy choose accredited a system that handed ownership to Neiman Marcus lenders in return for forgiving about $4 billion of the chain’s $5.5 billion in borrowings.

”Daniel Kamensky abused his situation as a committee member in the Neiman Marcus personal bankruptcy to corrupt the approach for distributing property and get excess profits for himself and his hedge fund,” Performing Manhattan U.S. Legal professional Audrey Strauss mentioned in a statement Wednesday.

New York-primarily based Marble Ridge was founded in 2015 by Kamensky, a previous associate at hedge fund Paulson & Co. who started his job as a personal bankruptcy legal professional. The business specialized in distressed credit card debt investments and the restructuring of troubled issuers.

Marble Ridge shut down and commenced returning cash to traders in August immediately after a U.S. government investigation uncovered Kamensky, its managing husband or wife, at fault for making an attempt to interfere with Neiman’s auction of property in individual bankruptcy.

Kamensky was accused of securities fraud, extortion and obstruction for pressuring an financial investment financial institution to fall its program to outbid Marble Ridge for a stake in Neiman’s Mytheresa device all through the luxurious retailer’s individual bankruptcy, and then looking for to include it up.

Collectors ended up demanding a piece of Mytheresa to compensate for their losses and counting on Kamensky to aid get the highest return for anyone. U.S. officials claim Kamensky sought to consider advantage of his job to profit his portfolio at the cost of the other creditors.

As component of a independent settlement with the U.S. trustee, an arm of the Justice Office that displays corporate bankruptcies, Kamensky agreed to shell out $1.4 million to deal with legal professional expenses associated to the investigation of his conduct and agreed not to consider to collect any debt Neiman Marcus may perhaps owe him until other lenders are repaid.

He also agreed to make $100,000 in charitable donations and carry out 200 several hours of community assistance. Kamensky has agreed never ever to provide on another official bankruptcy committee.

Chris Dolmetsch, Katherine Doherty and Steven Church of Bloomberg

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