What happened at Bed Bath & Beyond in 2023?
Bed Bath & Beyond Inc. was a retailer listed on Nasdaq. It sold goods mainly for the home and for babies, the latter through its buybuy BABY stores.[S13]
On Apr 23, 2023, the company and some of its subsidiaries filed for Chapter 11 bankruptcy. The case was in the US Bankruptcy Court for the District of New Jersey.[S12]
Chapter 11 usually lets a company restructure its debts while it keeps operating.[S25] Here, the company said it would use the process for "an orderly wind down of its businesses".[S13]
Each step, from a late quarterly report to a court-confirmed plan, was disclosed in an SEC filing. The timeline lists them in order.
What was filed, and when?
Company filings are on the SEC's EDGAR system. Each step below names the filing it comes from.
Late-filing notice for the 10-Q, with a going-concern warning[S1][S2]
The company filed Form 12b-25 for its quarter ended Nov 26, 2022. The same day, it ended its offers to exchange its unsecured notes, as their conditions were not met.
Third-quarter results released on an 8-K[S3][S4]
The press release showed net sales of $1.259 billion and a net loss of $393.0 million for the quarter. The 10-Q itself was still not filed.
8-K: Nasdaq notice for the missing 10-Q[S4]
Nasdaq's notice of Jan 12 said the company did not meet Listing Rule 5250(c)(1), on timely filing. The notice had no immediate effect on the listing.
10-Q filed, reporting that the loans were called[S5]
The 10-Q repeated the going-concern conclusion. It said the lenders' agent had declared the credit facility loans due immediately on Jan 25.
8-K: offering of preferred stock and warrants announced[S6]
The company also reported that Nasdaq had confirmed on Jan 27 that it again met the filing rule.
8-K: offering closed, lenders waive the defaults[S7]
The company received about $225 million at closing. The lenders waived the defaults and cut the revolving credit line from $1.13 billion to $565 million.
8-K: date set for the missed note interest[S9]
Interest due on Feb 1 on three series of senior notes was to be paid on Feb 28, 2023.
8-K: warrant exchanged, new programs to sell shares[S11]
The company swapped the remaining preferred stock warrant for common shares and rights. It set up a $300 million at-the-market program and a purchase agreement of up to $1 billion.
Chapter 11 petitions filed[S12][S13]
The company reported a commitment of about $240 million of debtor-in-possession financing, subject to court approval. That is a loan to a company while it is in Chapter 11.
8-K: Nasdaq delisting notice[S14]
Nasdaq said it would delist the stock because of the Chapter 11 cases. Trading was to be suspended at the opening of business on May 3, 2023.
10-K filed for the year ended Feb 25, 2023[S15]
It showed a net loss of $3,498.8 million for the year. The auditor's report included a going-concern paragraph.
Brand and online assets sold to Overstock.com[S16][S17]
Overstock.com completed its purchase of intellectual property, business data and other assets for $21.5 million. The agreement was first reported on Jun 13.
Form 25 filed by Nasdaq[S18]
Form 25 is the notice that removes a security from listing on an exchange.
Court approves the buybuy BABY sale[S19]
The sale order approved selling the buybuy BABY brand and related assets for about $15.5 million. The 8-K said no qualified bids for it as an operating business had come in.
Chapter 11 plan confirmed[S20][S21]
The court confirmed a plan for an orderly wind-down and liquidation. The plan provided for canceling all interests in the company, including its shares.
Plan takes effect; Form 15 filed[S22][S23]
The common and preferred stock were canceled. The company, renamed 20230930-DK-Butterfly-1, Inc., filed Form 15 to end its registration.
What did the January filings say?
A 10-Q is the quarterly report a company files with the SEC. Our entry on the 10-Q explains its parts.
When a 10-Q will be late, the company files Form 12b-25 within one business day of the due date. If it then files within five calendar days, the 10-Q counts as filed on time.[S24]
Bed Bath & Beyond's notice of Jan 5, 2023 said it expected to file on Jan 10.[S1] The 10-Q was filed on Jan 26, after Nasdaq's notice of Jan 12.[S4][S5]
The notice said the company needed more time for quarter-end work, including testing its assets for impairment. An impairment is a write-down of an asset's value on the books.[S1]
The same notice carried a going-concern warning. The company had concluded that there was "substantial doubt about the Company's ability to continue as a going concern".[S1]
A going concern is a business expected to keep operating. The company based its conclusion on recurring losses, negative operating cash flow and its cash projections.[S1]
The notice also gave preliminary figures. It estimated a quarterly net loss of about $385.8 million, including about $100.0 million of impairment charges.[S1]
The results release of Jan 10 showed a net loss of $393.0 million. It put the non-cash impairment charges at $100.7 million.[S3]
What did the 10-Q add about the loans?
The company had two secured loans from a group of lenders. One was a $1.130 billion revolving credit line backed by assets; the other, a $375 million term loan.[S6]
The 10-Q said events of default happened on or around Jan 13, 2023. It cited a failure to prepay an overadvance and to meet a financial covenant, among other things.[S5]
A covenant is a promise in a loan agreement, such as keeping a ratio above a set level. An overadvance is borrowing above what the loan's formula allows.
On Jan 25, the lenders' agent, JPMorgan Chase Bank, declared the loans due at once. It also added default interest of 2% a year.[S5]
The 10-Q gave this in Item 5, "in lieu of filing such information on a Current Report on Form 8-K".[S5] The 8-K item it named was Item 2.04, for events that make a debt due early.[S5]
Our entry on the 8-K explains how its items work.
At Nov 26, 2022, the company owed $550.0 million on the revolving line and $375.0 million on the term loan. It also had $1.030 billion of senior notes.[S5]
Cash, cash equivalents and restricted cash were $225.7 million. Operating activities used $890.0 million of cash in the nine months to Nov 26.[S5]
How did the February financing work?
On Feb 7, 2023, the company sold Series A convertible preferred stock and two sets of warrants. A warrant is a right to buy more shares on set terms.[S7]
It received about $225 million at closing. It said it could receive about $800 million more over up to ten months, if conditions were met.[S7]
The conditions included staying listed on an exchange and not filing for bankruptcy. The company also needed enough authorized shares to issue.[S7]
Holders could convert the preferred stock into common shares at a fixed price. They could instead choose a lower price tied to recent trading, subject to a floor.[S8]
The prospectus supplement said the offering would significantly dilute existing holders' ownership. Dilution means each existing share is a smaller slice of the company.[S8]
It also said that if the transactions were not completed, "we expect that we will likely file for bankruptcy protection".[S8]
The lenders waived the defaults on Feb 7. The revolving line was cut from $1.13 billion to $565 million, and a $100 million term loan was added.[S7]
The company had missed an interest payment on its senior notes.[S7] It later said the interest due on Feb 1 would be paid on Feb 28, 2023.[S9]
What happened to the rest of the financing?
By Mar 7, 2023, the company had received $360.0 million from the offering and warrant exercises.[S10] On Mar 30, it said it expected it could not meet the conditions to force more warrant exercises.[S11]
It exchanged the remaining warrant for 10,000,000 common shares and rights to 5,000,000 more. The rights depended on shareholders approving a reverse stock split.[S11]
A reverse split merges several shares into one. Our entry on stock splits and reverse splits explains how they work.
The same 8-K set up a $300 million at-the-market program, which sells new shares through a broker over time.[S11] It said that at recent trading prices, it might lack enough authorized shares without the reverse split.[S11]
The special meeting for that vote was set for May 9, 2023. The board canceled it on Apr 25, after the bankruptcy filing.[S14]
What did the Chapter 11 filing say?
The 8-K of Apr 24 reported the petitions under Item 1.03, "Bankruptcy or Receivership".[S12]
The filing was an event of default under the credit agreement and the senior notes. It made those debts due at once.[S12]
At the petition date, the notes totaled $1,029.9 million in principal.[S12] The 8-K said the company expected a Nasdaq delisting notice and did not intend to appeal.[S12]
The press release said 360 Bed Bath & Beyond and 120 buybuy BABY stores would stay open as closures began.[S13]
What did the annual report filed in June show?
The 10-K for the year ended Feb 25, 2023 was filed on Jun 14, 2023. Our guide shows how a 10-K is laid out.[S15]
Net sales were $5,344.7 million, against $7,867.8 million the year before. The net loss was $3,498.8 million.[S15]
The auditor, KPMG LLP, included a "Going Concern" paragraph in its report of Jun 13, 2023. It pointed to recurring losses and negative operating cash flows.[S15]
How did the share count change?
The filings give the number of common shares outstanding on three dates.
Bed Bath & Beyond common shares outstanding
From the 10-Q cover (Nov 26, 2022), the 10-K cover (May 9, 2023) and the 8-K of Sep 20, 2023 (Jul 20, 2023).
million shares
Sources
Bed Bath & Beyond Inc.: Quarterly Report on Form 10-Q for the quarter ended Nov 26, 2022 (cover, liquidity and going-concern note, risk factors, Item 5), filed Jan 26, 2023 [S5]; Bed Bath & Beyond Inc.: Annual Report on Form 10-K for the fiscal year ended Feb 25, 2023 (cover, Item 3 Legal Proceedings, income statement, auditor's report), filed Jun 14, 2023 [S15]; Bed Bath & Beyond Inc.: Form 8-K, Item 1.03 (confirmation of the Chapter 11 plan), Sep 20, 2023 [S20]
See the numbers
The 10-Q cover showed 117,321,914 shares at Nov 26, 2022.[S5] The 10-K cover showed 739,056,836 at May 9, 2023.[S15]
The 8-K of Sep 20, 2023 gave 782,005,210 shares at Jul 20, 2023. It said no preferred shares were outstanding then.[S20]
Our entry on dilution explains how a larger share count changes each share's slice.
What did the confirmed plan say?
The court confirmed the Second Amended Joint Chapter 11 Plan on Sep 14, 2023. The order is Doc 2172 in Case No. 23-13359.[S21]
The plan provided for an orderly wind-down and liquidation of the businesses.[S20] Each interest in the company was to be "canceled, released, and extinguished", with no recovery or distribution.[S21]
An interest here means an ownership stake, such as a share. The order said those holders were deemed to have rejected the plan, so they did not vote.[S21]
The 8-K of Sep 20 also quoted a monthly operating report filed with the court. At Jul 31, 2023, it showed total assets of about $42.4 million and liabilities of about $1,503.6 million.[S20]
The 8-K said those figures had not been audited or reviewed by the company's accounting firm.[S20]
The plan took effect on Sep 29, 2023. The 8-K that day said the common and preferred stock were canceled without consideration.[S22]
The SEC's investor bulletin says common stock is "the last in line" in a bankruptcy. Creditors, including bondholders, suppliers and employees, come first.[S25]
What could a reader of the filings have noticed?
These items were on the record at the time. Each is stated as the filing put it.
- A date that passed. The Jan 5 notice gave Jan 10 as the 10-Q date. The 10-Q was filed on Jan 26.[S1][S5]
- The warning came first in a notice. The going-concern conclusion appeared in the Form 12b-25, three weeks before the 10-Q.[S1][S5]
- Preliminary and reported figures. The notice estimated a quarterly net loss of about $385.8 million. The results release showed $393.0 million.[S1][S3]
- A default inside a 10-Q. The notice calling the loans appeared in the 10-Q's Item 5, not on a separate 8-K.[S5]
- Money with conditions. Most of the February financing depended on conditions, including no bankruptcy filing. By Mar 7, $360.0 million had come in.[S7][S10]
- The company's own statement. The prospectus supplement said it expected to file for bankruptcy if the transactions were not completed.[S8]
Where do these items appear in filings?
- A late report. On Form 12b-25, filed as NT 10-Q or NT 10-K, with the reasons in Part III.[S1][S24]
- Going-concern doubt. In the notes and risk factors of a 10-Q or 10-K. In the 10-K, the auditor's report added its own paragraph.[S5][S15]
- Exchange notices. In an 8-K under Item 3.01, as in the Apr 25 delisting notice.[S14]
- Bankruptcy. In an 8-K under Item 1.03. Bed Bath & Beyond attached the plan confirmation order to an 8-K as an exhibit.[S12][S20]
- New share sales. In a prospectus supplement filed under Rule 424(b)(5), and in the 8-K reporting the deal.[S7][S8]
What does this case file leave out?
It records what each filing and court order said, and when. It does not judge the company, its management, its lenders or its shareholders.
The 10-K of Jun 14, 2023 described a putative securities class action and shareholder derivative action, filed on Aug 23, 2022. The company said it believed the claims were without merit and had filed a motion to dismiss.[S15]
This case file does not report on that lawsuit or any later rulings. It ends with the filings of Sep 29, 2023, and does not cover later bankruptcy court filings.