May 28, 2023

Great Indian Mutiny

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Bed Bath & Beyond files for bankruptcy

Bed Bath & Beyond has filed for Chapter 11 bankruptcy protection in New Jersey district court, after a series of financial maneuvers designed to turn the business around came up short.

The stock fell 36.9% on Monday.

Bed bath behind
a company.

Today announced that it and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of New Jersey,” the company said in a statement.

Bankruptcy proceedings are intended to effect an “orderly winding up” of business while the company attempts to find a buyer for some or all of its assets, which include inventory, storefront leases, and its brands. The company has already started selling liquidation.

like Barron I mentioned earlier that companies going through bankruptcy proceedings often sell their assets to pay off outstanding debts. According to the company’s bankruptcy filings, Bed Bath owes approximately $5.2 billion to a group of 25,001 and 50,000 creditors. The company has total assets of $4.4 billion, as of November 2022, the date of the company’s last quarterly filing.

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Bed Bath said 360 Bed Bath & Beyond and 120 buybuy BABY stores and locations “will remain open and continue to serve customers as the company begins its efforts to effectuate the closure of its retail locations.” The company said it received a pledge of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending to continue the business through the bankruptcy process.

The company said that if a buyer checks in at the 11th hour to purchase the same chain, Bed Bath will “walk away” any store closures needed to carry out the transaction.

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Bed Bath has been warning since January that it is considering filing for bankruptcy if it is not able to quickly turn around its business. At the time, the company said it had triggered default events with creditors.

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Since then, the company has proposed a series of financial maneuvers in an effort to avoid Chapter 11.

In February, the company announced — and completed — a separate public stock offering intended to raise more than $1 billion. That deal allowed Bed Bath to enter into a new agreement with creditors that waived previous defaults, allowing it to continue in business while turning its business around. But that deal collapsed in late March, as BidPath said it had ended its share offer.

His recent capital-raising efforts included a new public stock offering, intended to raise $300 million, and plans to sell $1 billion in newly issued shares to B. Riley Principal Capital.

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But because stocks traded below the dollar, the effort failed. As of April 10, the company had raised about $48.5 million through the B. Riley agreement, according to a filing With the Securities and Exchange Commission. Bed Bath has been planning a reverse stock split to help boost its share price, with shareholders scheduled to vote on the initiative at a special meeting on May 9.

Write to Sabrina Escobar at [email protected]