Bed Bath & Beyond is confident it can offload its names and stores after it declared bankruptcy, but shareholders are expected to be wiped out as its stock plummets.
The home goods retailer, which declared bankruptcy Sunday after a series of failed Hail Mary efforts to keep operations running, detailed its descent to insolvency in a series of court filings. But the company noted it is still marketing the business to avoid outright liquidation.
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“While the commencement of a full chain wind-down is necessitated by economic realities, Bed Bath & Beyond has and will continue to market their businesses as a going-concern, including the buybuy Baby business,” the company’s chief financial officer and chief restructuring officer Holly Etlin wrote in a Sunday declaration to New Jersey’s bankruptcy court.
“Bed Bath & Beyond has pulled off long shot transactions several times in the last six months, so nobody should think Bed Bath & Beyond will not be able to do so again. To the contrary, Bed Bath & Beyond and its professionals will make every effort to salvage all or a portion of operations for the benefit of all stakeholders,” she added.
Shares of the company closed about 36% lower on Monday, giving it a market value of around $88 million. The stock has fallen about 90% this year. Last April, it was trading around $20 a share but closed at 18 cents on Monday.
Whatever money Bed Bath is able to generate in its liquidation and sale efforts will go to its secured creditors and bondholders, said Eric Snyder, chairman of the bankruptcy department at the law firm Wilk Auslander. He said its shareholders, including its many retail investors who took advantage of its short-lived meme stock craze, will be “wiped out.”
“There’s always some speculation that someone will come in and save the company and there’ll be something for equity but that was never really in the cards here,” said Snyder. “At the end of the day it’s just another story of another retailer…
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