Feb 16, 2008 10:00 am US/Central
Legal Spat Could Cancel Neiman Marcus Credit Cards
Retailer, Bank In Fight Over Interest Rate
DALLAS (CBS) ―
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There are 39 Neiman Marcus stores in the U.S. (File)
KTVT / KTXA
Hundreds of thousands of Neiman Marcus customers could soon see their credit card accounts canceled.
The cancellation is all part of a nasty legal battle between the 101-year-old Dallas retailer and HSBC Bank, which owns the store's credit card accounts, reported CBS station KTVT-TV in Dallas.
Allyson Heidenreich and her daughter just flew into town from St. Louis. The first place they visited was Neiman Marcus' downtown Dallas store.
"This was our first stop," Heidenreich said. "The flagship store, it's really amazing. They have things you can't get at home."
But now, the store that is known for its extravagant Christmas catalog and luxurious merchandise said that its sterling reputation could be tarnished.
Court papers show that nearly 200,000 credit cards could be canceled.
"We bought some things on my Neiman's credit card that I'd hate to see canceled," Heidenreich said.
Documents show that HSBC Bank threatened to close the customers' accounts and refuse to open new ones by Friday, unless Neiman Marcus agreed to raise the interest rates on the credit cards.
Neiman Marcus refused.
On Friday, Neiman Marcus said that a judge granted the retailer's request for a temporary restraining order.
Neiman Marcus could lose $500 million. HSBC Bank, which bought the store's private label credit card in 2005, said that it will lose $8.5 million over three years.
Attorney Stephen Drinnon is not involved in this dispute, but specializes in bank cases. He said, "This could mean serious danger to Neiman Marcus."
Neiman Marcus declined to comment on pending litigation. KTVT-TV was unsuccessful in attempts to contact HSBC Bank.
A judge will hold hearings on this case within the next two weeks.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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