Daniel Kamensky Sentenced to 6 Months in Neiman Marcus Fraud
Seems like the corrupting power of money has taken yet another toll. On Friday, Audrey Strauss, the United States Attorney for the Southern District of New York, announced that Daniel Kamensky, the founder and former manager of New York-based hedge fund Marble Ridge Capital (“Marble Ridge”), was sentenced in Manhattan federal court to six months in prison for engaging in fraud and extortion to pressure a rival bidder to abandon its higher bid for assets in connection with Neiman Marcus’s bankruptcy proceedings so that Marble Ridge could obtain those assets for a lower price. In February of 2021, Kamensky pled guilty before United States District Judge Denise L. Cote, who imposed the sentence on Friday.
U.S. Attorney Audrey Strauss said: “Daniel Kamensky
committed bankruptcy fraud – undermining the integrity of bankruptcy
proceedings and violating his fiduciary responsibility – in an effort to take
extra profits for himself and his hedge fund. As he himself predicted, this
fraud has now landed Daniel Kamensky in prison.”
Dnaiel Kamensky was the principal of Marble Ridge, a hedge
fund with assets under management of more than $1 billion that invested in
securities in distressed situations, including bankruptcies. Prior to opening
Marble Ridge, Kamensky worked for many years as a bankruptcy attorney at a
well-known international law firm, and as a distressed debt investor at prominent
financial institutions.
Neiman Marcus, an American chain of luxury department stores
with stores located across the United States, filed for Chapter 11 bankruptcy
protection in the United States Bankruptcy Court for the Southern District of
Texas in May 2020. At the outset of the bankruptcy, Marble Ridge, through
Kamensky applied to be on the Official Committee of Unsecured Creditors and was
thereafter appointed to be a member of the Committee. As a member of the
Committee, Kamensky had a fiduciary duty to represent the interests of all
unsecured creditors as a group.
During the bankruptcy process, the Committee had negotiated
with the owners of Neiman Marcus to obtain certain securities, known as
MyTheresa Series B Shares and ultimately, the Committee was successful in
coming to a settlement to obtain 140 million shares of MYT Securities for the
benefit of certain unsecured creditors of the bankruptcy estate. In July 2020,
Kamesky was negotiating with the Committee for Marble Ridge to offer 20 cents
per share to purchase MYT Securities from any unsecured creditor who preferred
to receive cash, rather than MYT Securities, as part of that settlement.
n July 31, 2020, Kamensky learned that a diversified
financial services company headquartered in New York, had informed the
Committee that it was interested in bidding a price between 30 and 40 cents per
share – substantially higher than Kamensky’s bid – to purchase the MYT
Securities from any unsecured creditor who was interested in receiving cash.
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