Marble Ridge Funds Founder Admits to Neiman Marcus Fraud

(Bloomberg) — Marble Ridge Cash founder Dan Kamensky pleaded responsible to fraud, 5 months immediately after he was charged in New York with abusing his position on a Neiman Marcus Team Inc. individual bankruptcy committee to invest in assets at an artificially reduced price tag.

a sign on the side of a building: A Neiman Marcus Group Inc. store stands in Hudson Yards in New York, U.S., on Tuesday, May 5, 2020. Many retailers are losing their grip with much of the economy shuttered by coronavirus lockdowns. And even as some states move to reopen, many Americans are hesitant to go back into brick-and-mortar establishments.

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A Neiman Marcus Team Inc. shop stands in Hudson Yards in New York, U.S., on Tuesday, Could 5, 2020. Quite a few retailers are losing their grip with a lot of the economic system shuttered by coronavirus lockdowns. And even as some states transfer to reopen, quite a few People in america are hesitant to go back into brick-and-mortar institutions.

Kamensky, 48, of Roslyn, New York, was charged by federal prosecutors in Manhattan in September with pressuring a rival to abandon a better bid for Neiman Marcus belongings so Marble Ridge could get them more cost-effective. The luxurious department keep chain filed for Chapter 11 bankruptcy protection in Might and Kamensky was a member of a committee of unsecured creditors. He faces as prolonged as five many years in jail at his sentencing, which is scheduled for May perhaps 7.


Load Mistake

Even in contentious personal bankruptcy instances, exactly where collectors and debtors frequently exchange rates of terrible religion and unfair offer-producing, it is scarce for prison costs to be filed.

In a hearing final yr right before a personal bankruptcy choose in Houston who referred Kamensky to federal prosecutors, the decide criticized the trader in unusually personalized language, at one place contacting him a thief “of the most affordable character.”

Read through additional: Decide Blasts Marble Ridge’s Kamensky in Court docket

A day following Kamensky’s arrest, the personal bankruptcy judge authorized a plan that handed ownership to Neiman Marcus collectors in return for forgiving about $4 billion of the chain’s $5.5 billion in borrowings.

“Daniel Kamensky abused his placement as a committee member in the Neiman Marcus personal bankruptcy to corrupt the approach for distributing property and take added income for himself and his hedge fund,” Performing Manhattan U.S. Legal professional Audrey Strauss claimed in a statement Wednesday.

Kamensky’s lawyers did not right away respond to an electronic mail in search of remark on the plea.

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

Marble Ridge shut down and begun returning revenue to investors in August immediately after a U.S. government investigation located Kamensky, its controlling companion, at fault for making an attempt to interfere with Neiman’s auction of belongings in personal bankruptcy.

Kamensky was accused of securities fraud, extortion and obstruction for pressuring an investment decision lender to drop its system to outbid Marble Ridge for a stake in Neiman’s Mytheresa device in the course of the luxurious retailer’s individual bankruptcy, and then trying to find to protect it up.

Creditors had been demanding a piece of Mytheresa to compensate for their losses and counting on Kamensky to help get the maximum return for absolutely everyone. U.S. officers claim Kamensky sought to just take advantage of his position to reward his portfolio at the cost of the other collectors.

As portion of a separate settlement with the U.S. trustee, an arm of the Justice Section that displays corporate bankruptcies, Kamensky agreed to spend $1.4 million to protect legal professional expenses similar to the investigation of his conduct and agreed not to consider to accumulate any debt Neiman Marcus may well owe him until eventually other collectors are repaid. He also agreed to make $100,000 in charitable donations and conduct 200 hrs of community company. Kamensky has agreed never to provide on a different formal personal bankruptcy committee.

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