NEW YORK — The merger of Federated Department Stores and R.H. Macy & Co. is one step closer to reality following Bankruptcy Judge Burton R. Lifland’s decision Thursday to approve the union.
The approval was expected since all of the major creditor groups threw their support behind the merger July 14, the day the deal was announced.
As of now, the only obstacle is New York State Attorney General G. Oliver Koppell. Last month he pledged to block the merger unless Federated divests itself of all 12 Macy stores in the metropolitan area,including the Herald Square flagship.
At Thursday’s hearing, Harvey Miller, of Weil Gotshal & Manges, counsel to Macy’s, told Lifland that Federated is in “active negotiations” with Koppell which should lead to an acceptable agreement.
“That issue will be resolved and this railroad will get to the station,” Miller predicted.
Federated’s attorney, David Heiman, was also optimistic about negotiations with Koppell, noting “very substantial progress is being made” between Federated and Koppell. Neither attorney would elaborate on the talks.
Asked after the hearing which stores will be closed, Miller said Federated will disclose that information shortly before it presents its amended disclosure statement to Lifland on Sept. 29.
Lifland expressed concern about two New York traditions: Macy’s annual Thanksgiving Day Parade and Macy’s July 4 fireworks show.
“There ought to be a commitment to maintain the Thanksgiving Day parade and the fireworks display,” remarked Lifland, who said he was speaking on behalf of “public interest.”
Miller and Heiman both promised that the parade and the fireworks would continue.
Separately, lawyers, accountants and investment advisers involved in Macy’s case submitted a $5.93 million bill for their work during the three months ended July 31.
Weil Gotshal & Manges, Macy’s attorneys, submitted the largest of the 14 bills — $2.05 million — followed by Deloitte & Touche, Macy’s accountants, which is asking for $1.07 million.
Others asking hefty sums for work in the case include: The Blackstone Group, Macy’s financial advisers, $549,000; Otterbourg, Steindler, Houston & Rosen, attorneys for the unsecured creditors, $416,359; and Houlihan, Lokey, Howard and Zukin Inc., financial advisers to the unsecured bondholders committee, $383,349.
A hearing to consider the fee applications is set for Sept. 26.
Macy has already paid out nearly $47 million in professional fees.
— Fairchild News Service