Home Business Bed Bath is considering filing for bankruptcy in New Jersey and is beefing up its legal team

Bed Bath is considering filing for bankruptcy in New Jersey and is beefing up its legal team

by SuperiorInvest

A “Store Closing” banner at a Bed Bath & Beyond store in Farmingdale, New York, on Friday, Jan. 6, 2023.

Johnny Milano | Bloomberg | Getty Images

Bath & Beyond bed is assembling its legal team as the troubled retailer prepares for a potential bankruptcy filing in New Jersey in the coming weeks, according to people familiar with the matter.

The company has hired law firm Cole Schotz to help with a potential filing in U.S. Bankruptcy Court for the District of New Jersey, according to the people, who were not authorized to speak publicly on the matter. However, the situation remains fluid and plans may change, the people added.

Bed Bath was in negotiations for financing that would keep it afloat if it filed for bankruptcy, This was reported earlier by CNBC. The company is also in the midst of a sale, hoping to keep its namesake chain and Buybuy Baby store alive.

Still, the Union, New Jersey-based retailer is moving to file for bankruptcy in its home state, an increasingly popular venue for Chapter 11 cases, the people said.

Earlier this week, a fellow seller Party City filed for Chapter 11 bankruptcy protection with plans to restructure its balance sheet and move forward with a smaller store footprint. This filing was made in the US Bankruptcy Court for the Southern District of Texas.

A Bed Bath spokeswoman said the company does not comment on speculation or specific relationships, saying only that it is working with advisors to regain market share and explore several avenues.

“We have a team, both internally and externally, with a proven track record of helping companies successfully navigate difficult situations and emerge stronger,” the spokeswoman said in a statement.

A representative for Cole Schotz did not respond to requests for comment.

The retailer is working with other advisers, including Kirkland & Ellis, a law firm well known for representing bankrupt companies as they work through their financial problems. Kirkland & Ellis and Cole Schotz also serve as legal advisors to crypto lender BlockFi, who filed for Chapter 11 protection in New Jersey Bankruptcy Court.

Bed Bath also recently hired consulting firm AlixPartners as one of its advisors, replacing Berkeley Research Group, This was reported earlier by CNBC.

Despite efforts to stave off a bankruptcy protection landing, a filing is likely in the coming weeks, the people said.

Earlier this month, Bed Bath warned of imminent bankruptcy as its turnaround plans failed to improve business and his balance sheet worsened. The retailer is facing a heavy debt load, declining sales and mounting losses.

Bed Bath said Thursday received notification from the Nasdaq stock market that it was in default after it failed to file its quarterly earnings report on time. The company said it is working to finalize its report and submit it to regain compliance within 60 days.

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