The Saks Global Simon Property Settlement Clears the Last Big Obstacle to Bankruptcy Exit

The actual course of a company bankruptcy in 2026 is instructive. The headlines, shop closures, and startling drops in once-iconic companies receive the majority of the public’s attention. The main job, however, takes place in the more subdued settings—the Houston courtroom, the Indianapolis conference rooms, the side sessions where Sidley Austin attorneys and the debtor’s restructuring team circle a single language in a lease agreement to choose whether to fight or settle.

The luxury retailer and its biggest landlord had been at odds for months. On Friday, May 8, Saks Global and Simon Property Group filed a settlement with the U.S. Bankruptcy Court for the Southern District of Texas, resolving one of the final issues before Saks Global’s anticipated June emergence from Chapter 11.

The settlement settles a heated and targeted battle. Simon personally delivered termination notices on two of the chain’s most valuable sites in January, just days before Saks Global declared bankruptcy. The Stanford Shopping Center in Palo Alto has a Neiman Marcus. The Woodbury Common Premium Outlets in Central Valley, New York, are hosting the Saks Off Fifth. Attorney Jeri Leigh Miller outlined Simon’s stance, which was that the retailer had neglected to pay almost $7 million in rent and other fees and that the leases had been canceled on their own terms prior to the bankruptcy stay taking effect. Saks Global didn’t agree.

The retailer’s attorney contended that a grace period was in effect, that some of the money had already been paid, and that the company would not be able to monetize the leases to pay its creditors if it were forced out of those sites. The stakes weren’t technical, but the disagreement was.

The larger relationship between the two businesses was what gave the standoff its texture. Since the early 1970s, Simon has been Saks’s landlord. When Saks purchased Neiman Marcus for $2.7 billion in late 2024—a deal that Simon Property assisted in underwriting and took an equity position alongside Authentic Brands Group and HBC—the relationship grew considerably. The same landlord was attempting to remove the same tenant from two of its most sought-after shopping centers some fifteen months later.

In real estate, such a reversal is impossible without a major problem occurring behind the scenes. The quiet portion was said aloud by Saks Global in its court documents, when it accused Simon of concluding that “it can make more money on certain of the leases by reletting them at higher rates.” In simple terms, that line captures the whole unpleasant conflict. When a landlord perceives an opportunity to mark a property for higher market rentals, they attempt to take advantage of a distressed tenant.

The settlement accomplishes multiple goals simultaneously; the majority of its wording were redacted in the court filing. It maintains Saks Global’s operations at the Stanford Neiman Marcus and the Woodbury Commons Saks Off 5th, the two challenged locations. Additionally, it offers better lease terms and rent savings for a wider range of unidentified Saks Global outlets at other Simon sites.

In return, Saks Global consented to particular safeguards for Simon in the event of a future Chapter 11 filing as well as shorter periods at certain sites. Simon can utilize the Stanford store’s termination option, but only if he pays Saks Global the proper amount. The latter detail is the type of little compromise that typically constitutes the most contentious few hours of the entire negotiation process.

In his affidavit, Saks Global’s chief restructuring officer, Mark Weinsten, described the settlement as a means of maintaining “a constructive go-forward relationship” with the company’s biggest landlord. That framing is more important than it seems. At a time when Saks Global is attempting to project enough stability to draw ongoing vendor cooperation, litigating the lease termination dispute may have postponed the Chapter 11 exit by weeks or even months.

Additionally, the company recently received court authority to raise up to $500 million in financing from its creditors, providing it with the necessary runway to exit bankruptcy and transition to a scaled-back operating model. Without the biggest landlord on board, none of that functions properly.

Compared to what was presented in court in January, Saks Global’s post-bankruptcy footprint has significantly shrunk. Along with shutting down nearly the whole Saks Off Fifth off-price chain, the retailer is closing three Neiman Marcus stores and eighteen Saks Fifth Avenue sites. One of the more intriguing concerns in U.S. retail at the moment is whether the model that results from this restructure can support three premium luxury banners under one corporate roof.

In an era of online shopping, dwindling mall attendance, and shifting customer preference toward brand-direct purchasing, American department stores, in general, have spent the better part of a decade attempting to figure out what they are for. Nordstrom is now a private company. Macy’s hasn’t exactly expanded, but it has steadied. The most aggressive recent attempt to consolidate the high-end of the market is Saks Global’s venture, which unifies ownership of three legacy brands. One account of the experiment’s progress was provided by the bankruptcy filing fifteen months later.

A subtle aspect of how landlords and tenants interact in the contemporary commercial real estate market is also revealed by the agreement with Simon. Class A shopping centers, such as Woodbury Commons and Stanford Shopping Centers, are still really valuable. There is foot traffic there. Luxury brands can benefit from their demographic catchment areas. In these locations, the rent per square foot is significantly more than it was five or 10 years ago. Simon’s initial effort at termination was made possible by this dynamic.

The settlement implies that even a tenant in Chapter 11 has some negotiating power when its shop is the type of anchor that defines the wing of the mall it occupies, as it maintains Saks’s tenancy and modifies terms. Speaking with retail real estate experts, there is a sense that mall owners have become more aggressive in 2025 and 2026, and that insolvent tenants are increasingly the setting where this aggression is put to the test in court.