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Hedge fund Marble Ridge to shut after Neiman Marcus blowup

Katherine Doherty and Sridhar Natarajan
Bloomberg

Hedge fund Marble Ridge Capital LP is shutting down after a U.S. government investigation found its managing partner at fault for trying to interfere with Neiman Marcus Group Inc.’s auction of assets in bankruptcy.

The firm told investors it would start returning money and wind down operations following a report from the U.S. Department of Justice that detailed the actions of money manager Dan Kamensky, according to people familiar with the matter, who asked not to be identified because the details aren’t public. A spokesman for Marble Ridge confirmed the fund was winding down.

Marble Ridge Capital LP is shutting down after an investigation found its managing partner tried to interfere with Neiman Marcus’s bankruptcy.

The U.S. Trustee, a bankruptcy court watchdog, accused Kamensky of misconduct for trying to stop a competing bidder from buying some of Neiman Marcus’s assets. Marble Ridge characterizes itself as the largest single unsecured creditor of the luxury retailer as of its bankruptcy date, according to a report submitted by the trustee.

“After much consideration, and in light of the operating environment, we have made the difficult decision to commence an orderly wind-down of the Marble Ridge funds,” the firm told investors late Thursday.

It declined to comment further on the report from the government agency, which was filed in the U.S. bankruptcy court earlier that day.

“Marble Ridge will manage the liquidation in the best interests of our investors and with the objective of protecting and enhancing the value of the funds’ assets,” the firm told investors.

The winding down was earlier reported by Reuters.

New York-based Marble Ridge was founded in 2015 by Kamensky, a former partner at hedge fund Paulson & Co. who started his career as a bankruptcy attorney. The firm specializes in distressed debt investments and the restructuring of troubled issuers.

Marble Ridge has challenged Neiman in public forums long before the retailer’s filing. It repeatedly attacked the company for actions including moving its valuable MyTheresa assets to a subsidiary out of its reach.

The recent altercation in Neiman’s bankruptcy came to light in recent weeks when U.S. Bankruptcy Judge David R. Jones, who is overseeing the reorganization of the company, asked the trustee to investigate Kamensky’s actions while he served on an official committee of unsecured creditors.

The court hasn’t yet taken any formal action against Kamensky, and U.S. Trustee Henry Hobbs asked the judge to consider what “remedial measures” are appropriate given the investigation’s findings.