Bed Bath & Beyond Inc.’s Canadian division will shut down its stores under court protection after the company received an unusual lifeline earlier this week to save its U.S. operations from bankruptcy, WSJ Pro Bankruptcy reported. The troubled home-goods retailer on Friday filed its Canadian division for protection under the Companies’ Creditors Arrangement Act, Canada’s rough equivalent of chapter 11 bankruptcy. Bed Bath & Beyond has “reluctantly concluded” that even with the lifeline of its recent equity raise, there isn’t enough capital available both to restructure its U.S. business and bring the Canadian business to profitability, the company said in filings with an Ontario court. Bed Bath & Beyond operates 54 Bed Bath & Beyond stores and 11 Buybuy Baby stores in Canada, with 387 full-time employees and 1,038 part-time employees, court papers show. The company said it plans to “effect an orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its leased retail stores and premises.” The Canadian insolvency case doesn’t cover the U.S.-based parent company, which struck an unusual equity-raising deal earlier this week with hedge fund Hudson Bay Capital Management LP and other investors. It provided the company with $225 million in immediate proceeds, along with commitments for up to $800 million over the next 10 months, so long as the company meets certain financial conditions such as staying current on its debts.
