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Saks Prepares to Ring In 2026 With Bankruptcy Filing; Lawyer Fees Cross $3,000 Threshold
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, January 2. We hope you enjoyed the holiday break and thank you for joining us in 2026. Today, we have news on an impending bankruptcy filing by Saks Global and on the continued double-digit yearly increases in bankruptcy lawyers' fees, which are expected to continue this coming year.
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Kena Betancur/Agence France-Presse/Getty Images
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Saks prepares for bankruptcy after missing debt payment. The owner of Saks Fifth Avenue and Neiman Marcus is in talks with creditors about financing for a chapter 11 filing that could arrive within days.
Saks Global missed a payment earlier this week on debt it took on to buy Neiman Marcus, a merger that was supposed to create a luxury-retailing juggernaut better able to streamline costs and hang on to their wealthy shoppers. But the gambit has faltered as the combined entity’s debt load has proved unsustainable and it struggled to keep up with payments to vendors to keep its stores well-stocked.
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Bankruptcy fees to reach $3,000 hourly threshold in 2026. Hourly rates for bankruptcy lawyers are topping $3,000, contributing to soaring chapter 11 costs that have prompted more companies to turn to faster out-of-court restructurings.
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Major law firms have been raising prices at double-digit rates. Latham & Watkins has said its top billing rate will exceed $3,000 an hour in 2026. Kirkland & Ellis has said its top hourly rate will approach that level.
Higher billing rates have been the key driver of the 11% revenue increase law firms recorded in the first nine months of last year, according to a December client advisory from Citi Wealth’s Law Firm Group and Hildebrandt Consulting.
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Private equity has more housecleaning to do in 2026. Sponsor firms have been sitting on a glut of unsold companies for years, leaving many of their investors frustrated and making it harder to raise new funds. Despite a pickup in broader deal activity in recent months, the backlog of companies is growing.
Private-equity firms are reluctant to accept meager returns—and lower performance-based compensation for employees—on companies they bought at generous valuations during the boom times. That is gumming up private equity’s tried-and-true buyout formula.
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Sales of general-partner interests stand to grow. Private-equity firms seek outside cash for various reasons, such as expanding into new business lines, cashing out aging partners or funding a larger GP commitment to raise new funds. The private-equity downturn has added new pressure to sell stakes by increasing the need for external financing.
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Private credit eager to turn the page on a rough 2025. Credit-fund managers had to contend with high-profile bankruptcies tinged by fraud allegations last year, which called into question the stability of the asset class.
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Goldman Sachs’s private-credit company struggles to clean up soured bets. The bank’s business-development company, Goldman Sachs BDC, has changed management and restructured loans to weather souring loans, but investors are still unimpressed.
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J&J slammed with largest single talc verdict. A Baltimore city jury ordered Johnson & Johnson to pay over $1.5 billion in a lawsuit that alleged the company’s talc-based personal products gave a Maryland woman cancer.
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The verdict is the largest ever returned against J&J for a single plaintiff, according to lawyers of the Maryland woman, and is the latest in a string of legal judgments the company is facing over claims its talc products cause cancer. J&J has previously attempted to resolve the litigation through a bankruptcy settlement, but those efforts have been rebuffed by courts.
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