XML 37 R25.htm IDEA: XBRL DOCUMENT v3.23.1
Subsequent Events
12 Months Ended
Feb. 25, 2023
Subsequent Events [Abstract]  
Subsequent Events SUBSEQUENT EVENTS
Chapter 11 Cases

On April 23, 2023, (the “Petition Date”), the Company and certain of its direct and indirect subsidiaries (collectively, the “Debtors” or the “Company Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order approving joint administration under the caption “In re Bed Bath & Beyond Inc., Case No. 23-13359. Certain of the Company’s subsidiaries were not included in the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the Bankruptcy Court motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers for goods and services provided both before and after the Petition Date. In addition, the Company filed with the Bankruptcy Court a motion seeking approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on an interim basis for. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis consensually. A hearing is scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day motions, and final approval of the DIP Facility.

DIP Credit Agreement

Prior to the Petition Date, the Company Parties and Sixth Street Specialty Lending, Inc., Sixth Street Lending Partners and TAO Talents (the “DIP Parties”) agreed to enter into a senior secured super-priority debtor-in-possession term loan credit facility in an aggregate principal amount of $240.0 million subject to the terms and conditions set forth therein (the “DIP Credit Agreement”).
On April 24, 2023, the Bankruptcy Court entered an order approving entry into the DIP Credit Facility on an interim basis. Pursuant to the DIP Credit Agreement, the DIP Lenders have provided a senior secured super-priority debtor in possession term loan facility (the “DIP Facility”), consisting of (1) a new money single draw term loan facility in the amount of $40.0 million, and (2) a roll-up of certain secured obligations under the existing prepetition credit agreement between the Company Parties and the Prepetition FILO Lenders in the amount of $200.0 million. Borrowings under the DIP Facility are senior secured obligations of the Company and certain Company Parties, secured by a super priority lien on the collateral under the Amended and Restated Credit Agreement, dated as of August 9, 2021 (as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of August 31, 2022, that certain Second Amendment to Amended and Restated Credit Agreement and Waiver, dated as of February 7, 2023, that certain Third Amendment to Amended and Restated Credit Agreement and Waiver, dated as of March 6, 2023, that certain Fourth Amendment to Amended and Restated Credit Agreement and Waiver, dated as of March 30, 2023, that certain Fifth Amendment to Amended and Restated Credit Agreement and Waiver, dated as of April 6, 2023 and that certain Sixth Amendment to Amended and Restated Credit Agreement, Consent and Waiver, dated as of April 21, 2023, the “Existing Credit Agreement”), as well as all unencumbered assets of the Company Parties (subject to customary exceptions). The DIP Credit Agreement has various customary covenants, as well as covenants mandating compliance by the Debtors with a 13-week budget, variance testing and reporting requirements, among others. The proceeds of all or a portion of the proposed DIP Credit Agreements may be used for, among other things, post-petition working capital for the Company and its subsidiaries, payment of costs to administer the Chapter 11 Cases, payment of expenses and fees of the transactions contemplated by the Chapter 11 Cases, payment of court-approved adequate protection obligations under the DIP Credit Agreements, and payment of other costs, in each case, subject to an approved budget and such other purposes permitted under the DIP Credit Agreement and the Interim DIP Order or any other order of the Bankruptcy Court.

The Interim DIP Order provides certain milestones for the Chapter 11 Cases. Failure of the Debtors to satisfy these milestones without a waiver or consensual amendment would provide the Required DIP Lenders a termination right under the Interim DIP Order. These milestones include (i) the entry of an order approving the sale(s) of all or substantially all of the Debtors’ assets, (ii) the filing of a Chapter 11 plan and disclosure statement, in form and substance acceptable to the Required DIP Lenders (iii) the entry of an order confirming the Chapter 11 plan within 120 days after the Petition Date The Debtors have satisfied the first milestone as of the filing of these financial statements.

Adequate Protection

Pursuant to the Interim DIP Order, we are obligated to make certain adequate protection payments during our bankruptcy proceedings on each of our Prepetition Secured Obligations. The Prepetition Secured Obligations are each entitled to receive adequate protection as set forth to the extent of Diminution in Value of their respective interests in the Prepetition Collateral.

Nasdaq Delisting Proceedings
On April 24, the Company received written notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Chapter 11 Cases and in accordance with the Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that the Company’s common stock will be delisted from Nasdaq. Trading of the Company’s common stock was suspended at the opening of business on May 3, 2023.

Following delisting from Nasdaq, the Company’s common stock has been quoted in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for existing and potential holders of the common stock to trade the Company’s common stock and could further depress the trading price of the common stock. The Company can provide no assurance as to whether broker-dealers will continue to provide public quotes of the common stock on this market, or whether the trading volume of the common stock will be sufficient to provide for an efficient trading market.

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section 12(b) of the Exchange Act. The delisting became effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may determine, from the date of the Form 25 filing.

Potential Claims

The Debtors have filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors , subject to the assumptions filed in connection therewith. These schedules and statements may be subject to further amendment or modification after filing. Certain holders of pre-petition claims that are not governmental units are required to file proofs of claim by the deadline for general claims, which is currently expected to be June 30, 2023 (the “Bar Date”).
The Debtors' have received approximately 2,413 proofs of claim, primarily representing general unsecured claims, for an amount of approximately $181.7 million. These claims will be reconciled to amounts recorded in the Company's accounting records. Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Company may ask the Bankruptcy Court to disallow claims that the Company believes are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Company may identify additional liabilities that will need to be recorded or reclassified to Liabilities subject to compromise. In light of the substantial number of claims filed, and expected to be filed, the claims resolution process may take considerable time to complete and likely will continue after the Debtors emerge from bankruptcy.

Rejected Executory Contracts and Leases

Subject to certain exceptions, under the Bankruptcy Code, the Company Parties may assume, assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Company Parties from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Company Parties to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with the Company Parties discussed herein, including a quantification of the Company Parties’ obligations under any such executory contract or unexpired lease, is qualified by any overriding rejection rights the Company Parties have under the Bankruptcy Code.

Delisting of Our Common Stock form Nasdaq

In connection with the Chapter 11 Cases, on April 24, 2023, the Company received written notice (the “Delisting Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Chapter 11 Cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that the Company’s common stock will be delisted from Nasdaq. The Company did not intend to appeal this determination.
Trading of the Company’s common stock was suspended at the opening of business on May 3, 2023.