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Bed Bath & Beyond Inc. said it will try to sell up to $300 million of common stock in the open market while terminating a fundraising deal with hedge fund Hudson Bay Capital Management LP in the latest effort by the troubled home-goods retailer to stave off bankruptcy, WSJ Pro Bankruptcy reported. The Union, N.J.-based company broke off its equity-raising deal with Hudson Bay after reporting another sharp drop in sales in the most recent quarter. Bed Bath & Beyond also said that if its public offering fails to come through, the company expects to file for bankruptcy protection, likely wiping out holders of its common stock. Shares slumped 26% Thursday to hit an all-time low of 59 cents. The company now has a market capitalization of roughly $70 million. The new low caps a stark reversal from August when a burst of bullish interest from retail investors pushed the stock over $23, reminiscent of the dizzying rallies of other meme stocks like AMC Entertainment Holdings Inc. and GameStop Corp. The company’s hopes of avoiding chapter 11 ride on selling more shares to keep itself afloat as its sales erode and it closes hundreds of stores. New financing is crucial for the company to stock up inventory and pay down debt as it tries to turn around its business, which has deteriorated since consumers reacted poorly to a strategy shift away from brand-name products.

FTX founder Sam Bankman-Fried pleaded not guilty Thursday to new federal charges tied to the collapse of the crypto exchange while his lawyer said he plans to challenge the new criminal counts, arguing they violate the terms of the former chief executive’s extradition, the Wall Street Journal reported. Mr. Bankman-Fried appeared in a New York federal court to be arraigned on five charges that federal prosecutors unveiled in recent indictments, including one this week that alleged he conspired to bribe Chinese government officials in violation of a U.S. anticorruption law. His lawyer Mark Cohen entered the not guilty plea for Mr. Bankman-Fried during the proceeding. The Manhattan U.S. attorney’s office charged Mr. Bankman-Fried in December with eight criminal counts connected to stealing billions of dollars from FTX customers while lying to investors of the company and lenders to his crypto investment firm Alameda Research. Prosecutors have since filed two additional indictments, bringing the total number of criminal counts to 13. The charges range from securities fraud to a bank fraud conspiracy to a campaign-finance violation.

Hundreds of thousands of people around the world have been unable to access their funds after turmoil in the crypto industry took down some of its leading players. Along with FTX, crypto lenders Celsius, Voyager Digital, BlockFi, and Genesis Global Capital, as well as hedge fund Three Arrows Capital (3AC), all collapsed, leaving investors — from small traders to financial institutions — at the mercy of bankruptcy proceedings, Wired reported. These collapses, and the difficult situations that investors have found themselves in, have helped drive the growth of digital marketplaces for trading bankruptcy claims, which give speculators willing to wait out the legal cases a chance at large returns and cut-price exposure to crypto. Some, like Open Exchange, which is headed by the former founders of bankrupt hedge fund 3AC, are even trying to tokenize these claims, turning crypto failures into new tokens that holders can either sell off or post as collateral. Some claim holders accuse the marketplaces and buyers of taking advantage of distressed sellers. But with their money locked away, potentially for years, others are having to take the hard decision to sell their claims now for a fraction of their paper value. Buying claims in crypto bankruptcies is seen as a way to invest in crypto at a discount. Although each creditor’s claim is valued in dollars on the date of the bankruptcy filing, not denominated in crypto, the balance sheets of these firms are made up largely of crypto assets. Therefore, if crypto were to appreciate in price, claim holders would receive a greater return. In the case of Mt. Gox, the judge even decided that claim holders should share fully in the rise in crypto prices, meaning they are set to make a return of over 100 percent on their claims when redistribution begins on October 31. However, purchasing claims is not for the faint of heart, says Thomas Braziel, founder of 507 Capital, an investment company that specializes in distressed debt, which holds a large position in the Mt. Gox bankruptcy and others. Not only do creditors sometimes misrepresent the value of their claims, intentionally or otherwise — some people “fib around the edges,” says Braziel — but some claims turn out to be entirely fraudulent. Read more.

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Bankrupt startup SiO2 Medical Products Inc. on Thursday received court approval for a $120 million loan, which includes $60 million of new capital, on its way to a planned handover of the business to Oaktree Capital Management LP, WSJ Pro Bankruptcy reported. The Auburn, Ala.-based medical device company filed for chapter 11 bankruptcy protection on Wednesday, facing a liquidity crisis after its unsuccessful capital raise efforts in the past few weeks, SiO2’s lawyer Brian Schartz said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del. Bankruptcy Judge John Dorsey approved the $120 million bankruptcy loan sponsored by top lender Oaktree that will provide the business with $60 million of new capital, with the remaining $60 million to be used to pay back a portion of the debt held by Oaktree before the bankruptcy. Founded in 2012, SiO2 rapidly expanded in the medical device sector by manufacturing vials, syringes and tubes, using its patented materials. The company said it was running out of cash partly because of an ill-fated government contract signed during the pandemic to develop a vial for a COVID-19 vaccine. The 2020 contract granted SiO2 $143 million in funding to build necessary manufacturing facilities, while requiring as much as $128 million in expenditures under a cost-sharing agreement.