Saks Global has received approval from a US bankruptcy judge to draw on $400m in new cash, despite objections from its estranged business partner Amazon, reports The Sun.

US bankruptcy Judge Alfredo Perez approved the financing on Wednesday during a court hearing in Houston, Texas, saying that the cash would give Saks an opportunity to stabilise its business and restructure its debt, said the publication.

During the hearing, Saks chief restructuring officer Mark Weinstein said the business would be “dead in the water” without court approval for the funding, which would be used to pay vendors and the group’s 17,000 staff members.

It comes after Saks filed for bankruptcy on Tuesday, citing $3.4bn in debt following its failed merger with department store chain Neiman Marcus which was said to have caused cash shortfalls.

Saks Global attorney Debra Sinclair said that all of its shops remained “open for business” and that the company had no concern over weakening customer demand.

Sinclair said: “The customers are there, and we know this because when we do have goods available in our stores, we are able to sell them.

“The problem that you’ll hear a lot about today and over the course of this week has been that we have not been able to buy enough inventory to meet our demand.”

The $400m infusion approved by the judge is the first part of a financing package that the business values at $1.75bn.

Perez overruled an objection from Amazon before approving the bankruptcy loan, that said the funding would be “worthless” to Saks while it was in bankruptcy.

At the hearing, Amazon’s attorney Caroline Reckler said that the business had “little to no confidence” that Saks could successfully emerge from bankruptcy.

Amazon’s attorneys also said that the new loan incorrectly claimed that the retailer’s Manhattan flagship store had been used as collateral, meaning that Saks would lose the site if it failed to pay back the money.

The ecommerce giant argued that the property had already been used to guarantee up to $900m in payments owed to it for its collaboration on a “Saks on Amazon” online sales platform.

Perez also approved several routine requests to help the retailer avoid business disruptions during its bankruptcy, including enabling the business to catch up on late payments to vendors that provided goods and services to Saks before it filed for Chapter 11.

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