Bed, Bath, And Beyond Heading For Bankruptcy
Retailers have been facing difficulty with the advent of Amazon and online shopping now for decades. COVID may have provided the final nail in the coffin. What does that mean for workers? Well, there will be a number of workers who are now out of a job as fire sale of BB&B’s assets begin. The money will go to recoup creditors and vendors who will likely be getting a lot less money than they were owed.
The Chapter 11 filing will prevent creditors from taking adverse actions against Bed, Bath, & Beyond while it attempts to repay its debts. However, when a Chapter 11 occurs and the business isn’t making money, the tendency of the trustee is to divest its assets in a bid to repay creditors.
As of the writing of this article, Bed Bath & Beyond stocks are trading at around 10 cents, if you’re interested. As a result, the company’s common stock will be delisted from the NASDAQ.
What does this mean for consumers?
Essentially, the economy of retail has been in decline for decades, so bankruptcies like this aren’t out of the norm. They’re worse when they all happen at the same time and it appears that Bed Bath & Beyond is headed for bankruptcy after repurchasing its own stock from investors. In a bid to make investors whole, BB&B ultimately cost themselves millions in future gains as their stock continued to decline. It is now the workers who bear the brunt of the company’s collapse, workers who have been with the company sometimes for decades.
Is there a lesson to be learned from the fallout of BB&B. Essentially, investors take a risk when they purchase the stocks of a company. The company prioritized investors over its workers, repurchased failing stock at inflated prices, and now the company is facing Chapter 11.
In Chapter 11, the company has very little control over how its debts are repaid. The matter falls to a trustee who works in tandem with the bankruptcy court to see the debts repaid to the extent that they can be. The trustee is like a forensic accountant who operates on behalf of all of a company’s creditors. Bed, Bath, and Beyond does not have considerable assets now that the value of their stock is closing in on worthless.
So, the company purchased its worthless stock back and watched it devalue. Now, they’re declaring bankruptcy which will cause the closure of a large percentage of its stores. Those who relied on BB&B for their primary income stream may also be headed toward bankruptcy as their bills mount.
Talk to a Jacksonville Bankruptcy Lawyer Today
Jacksonville bankruptcy lawyer Carol Galloway represents the interests of those who are saddled with unpayable debt. There is an exit and you can find a fresh start. Call today to schedule a free consultation and we can begin discussing your next moves immediately.