Just days after Nasdaq delisted Bed Bath & Beyond for failing to file its quarterly report and weeks after announcing a new round of layoffs, the retailer submitted its Form 10-C to the United States Securities and Exchange Commission (SEC), admitting that it doesn’t have enough cash to pay its debts.
“At this time, the company does not have sufficient resources to repay the amounts under the credit facilities, and this will lead the company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code,” Bed Bath & Beyond‘s filing stated.
In response, Bed Bath & Beyond’s stock plummeted more than 20 percent Thursday afternoon, hovering well below $3 per share.
The retailer also just defaulted on its credit line with JP Morgan, owing $550 million under its asset-backed loan with the lender. These developments seem to further indicate that bankruptcy is imminent for the retailer.
According to a CNBC report, Bed Bath & Beyond retained the legal services of Cole Schatz, which has a sizable bankruptcy and restructuring practice and steered Christopher & Banks through its Chapter 11 collapse in 2021.
The company also has been in talks with potential lenders to fund its bankruptcy restructuring, and possible buyers for assets, such as its BuyBuy Baby brand.
Bed Bath & Beyond experienced inventory shortfalls during the important holiday shopping season due to vendors refusing or delaying shipments based on outstanding payments from the retailer. That reduced inventory contributed to Bed Bath & Beyond’s 33 percent net sales decline and 32 percent comp sales drop for the third quarter.