Bed Bath & Beyond’s woes keep adding up.
On Friday, ex-CEO Mark Tritton‘s lawsuit filed in a New York State court in Manhattan accused the Union, N.J. company of failing to pay some of his $6.8 million severance.
The complaint alleges that the store-cutting home goods retailer stopped making required bi-monthly payments in January because Bed Bath & Beyond needed to hold onto whatever cash it had, the company’s chief legal officer said, according to Reuters. The chain started the new year on the verge of bankruptcy after a dismal holiday season.
Tritton was dismissed as CEO in June last year after a disastrous first-quarter earnings where the company’s net loss ballooned to $358 million as net sales plunged 25 percent to $1.5 billion.
Bed Bath & Beyond was also sued in March by Sparx Logistics USA Ltd. in a Manhattan federal court. The complaint alleged breach of contract, among other claims, related to two agreements in which Sparx agreed to transport goods for the retailer from China to the U.S. via two ocean-going vessels.
The Sparx complaint said that Bed Bath & Beyond incurred “substantial fees under the contracts” totaling more than $6.4 million based on the delay in collecting shipping containers from the port and returning the empties. Sparx is seeking compensatory and punitive damages, as well as attorneys’ fees.
Bed Bath & Beyond executives did not respond to a request for comment on either lawsuit by press time.
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The retailer is already the subject of a purported class-action lawsuit alleging securities law violations in August. The lawsuit has been seen as a possible reason why former chief financial officer Gustavo Arnal, who was a named defendant, jumped to his death from a Manhattan skyscaper. He has since been dropped from the complaint.
And more recently, a former employee on Tuesday filed a lawsuit seeking class action status on behalf of himself and other employees against the retailer and its Harmon division alleging a Worker Adjustment and Retraining Notification (WARN) Act violation after the the retailer laid off 1,300 workers when it closed a handful of New Jersey stores.
Bed Bath & Beyond on Thursday resurrected concerns that bankruptcy isn’t off the table. The retailer managed to secure a “Hail Mary” rescue from Hudson Bay Capital Management for over $1 billion, only to lose the funding after its share price dropped below an agreed upon $1. 25 or $1.50 level, depending on timing.
After its share price tumbled below that threshold, Bed Bath & Beyond is now looking to raise $300 million through an equity offering.
Bed Bath & Beyond shares closed on Friday at 42 cents, suggesting the former meme stock is no longer a retail investor favorite. It also suggests the company might have a hard time finding investors who believe in its turnaround potential.
Financials aren’t the only stumbling block at Bed Bath & Beyond. Despite massive store closures and layoffs to cut overhead expenses, the retailer needs to fix operational problems. It needs merchandise that people want to buy and also has to convince vendors they can maintain good working relationships. This is why some financial experts believe a bankruptcy could be more likely than not.