Deutsche Bank knows what a troubled debtor looks like, and has more than its fair share of experience with loans that are never going to be repaid. And, well, it’s got a bad feeling about that $760 million bankruptcy exit loan it participated in way back in, uh, three weeks ago.
The department-store chain reported that it overvalued the inventory backing the asset-based loan by $159 million, Deutsche said in a Friday court filing. The overvaluation means Neiman [Marcus] is in default, Deutsche said.
Deutsche Bank said it has “concerns” about allowing Neiman to continue to have access to its cash 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.