The founder of a New York-based hedge fund has pleaded guilty to bankruptcy fraud for pressuring a rival investor to drop an offer to acquire certain assets from the bankruptcy of Neiman Marcus so that he could buy them for as little as half the price.
When luxury department store Neiman Marcus asked Chapter 11 bankruptcy protection in May, Marble Ridge Capital founder Daniel Kamensky was appointed co-chair of the official unsecured creditors committee. Kamensky was negotiating with the committee to acquire securities of Neiman Marcus known as Series B MyTheresa shares for $ 0.20 per share, according to the Office of the Attorney General for the Southern District of New York, when he learned that An unnamed investment bank wanted to offer between $ 0.30 and $ 0.40. each for the same actions.
The lawsuit against Kamensky alleges he contacted a senior trader and senior analyst at the investment bank and told them not to make an offer, arguing that Marble Ridge should have the exclusive right to purchase the securities. He reportedly threatened to use his position as committee co-chair to prevent the investment bank from acquiring the securities, and said Marble Ridge would never do business with the bank again if it didn’t abandon its offer.
After Kamensky’s threat, the investment bank decided not to make an offer for the securities. But when the bank informed the committee’s legal advisor of its decision, it also mentioned that it was doing so at Kamensky’s request. Kamensky then allegedly contacted the senior trader again and tried to get him to change his story and say he was wrong. Kamensky reportedly told them: “Do you understand … can I go to jail?” ”
As a member of the Unsecured Creditors Committee, Kamensky was required by law to represent the interests of all unsecured creditors as a group, according to the complaint, and the higher bid from the investment bank was clearly more favorable. for creditors as the offer of The Marble Ridge.
“Daniel Kamensky abused his position as a member of Neiman Marcus’ bankruptcy committee to corrupt the asset distribution process and take additional profits for himself and his hedge fund,” said Audrey Strauss, the US prosecutor in the United States. Southern District of New York, in a statement. A declaration.
Marble Ridge has since resigned from the committee and informed its investors that it intends to start downsizing and repaying investors’ capital.
The only bankruptcy fraud count to which Kamensky, 48, has pleaded guilty carries a maximum sentence of five years in prison. He will be sentenced in May.