Iconic American department store chain Saks has obtained approval from a US bankruptcy judge to draw on $400m (£299m) in new financing despite objections from its estranged business partner Amazon.

Saks Global, which also owns the Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman businesses among others, filed for Chapter 11 bankruptcy protection earlier this week after its debt topped $3.4bn (£2.5bn).

Reuters reported US bankruptcy Judge Alfredo Perez said the funding would give Saks a chance to stabilise its business and restructure its debt.

Saks chief restructuring officer Mark Weinstein said the retail group would be “dead in the water” without the cash injection, which would be used to pay suppliers and its 17,000 employees.

The £299m funding is the first tranche of a package that values the department store business at $1.75bn (£1.3bn).

Approximately $1.5bn (£1.1bn) was secured from an “ad hoc group” of senior secured bondholders and $240m (£178.3m) of “incremental liquidity” from asset-based lenders.

However, Amazon said it has “little to no confidence” that Saks can successfully emerge from bankruptcy.

The online giant argued the new loan claimed Saks Fifth Avenue’s Manhattan store as collateral, which had already been used to guarantee up to $900m (£672m) in payments owed to Amazon for its ‘Saks on Amazon’ online sales platform.

Reuters reported that Perez approved several routine requests to help Saks avoid business disruptions during the bankruptcy process, such as allowing ‍it to catch up on late payments to suppliers who provided goods and services before it filed for Chapter 11 protection.

Saks owes over $337m (£251m) to its suppliers, including $136m (£101.5m) to luxury brand Chanel and $26m (£19.4m) to Gucci owner Kering.

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