A Menomonee Falls window installer with hundreds of unhappy customers is entering chapter 11 bankruptcy, Fox6Now.com reported. Window Select confirmed that it plans to enter bankruptcy proceedings in late January. More than 400 consumers have filed complaints with Wisconsin Consumer Protection about Window Select. Many said they paid for projects that had not started — or were not finished. Window Select moved out of its headquarters in 2022. The company faces dozens of cases in small claims court.
Bed Bath & Beyond Inc. reported a wider net loss than expected yesterday, underscoring the likelihood of a bankruptcy filing within the next couple of months by one of the largest US home-goods retailers, Bloomberg News reported. The beleaguered retailer said its net loss widened to $393 million in the three months ended Nov. 26. Just last week, the company had said it expected to report a net loss of $386 million. That compares with a loss of $366 million in the second quarter. The company reiterated on Tuesday that it was considering “all strategic alternatives” to get back on financial track. “Multiple paths are being explored and we are determining our next steps thoroughly,” Bed Bath & Beyond Chief Executive Officer Sue Gove said in a statement. Last week, the retailer said those options included the possibility of bankruptcy, a warning that came after it withdrew a bond-swap offering. It had launched the plan in October to lessen its debt burden. The company said on Tuesday that it had about $200 million of cash on hand. Read more.
In related news, Bed Bath & Beyond will lay off more employees in an attempt to reduce costs, the company said yesterday, a week after announcing it was exploring options including bankruptcy, Reuters reported. Last year, company executives had said the home goods retailer was cutting about 20% of its corporate and supply chain workforce. "As our strategic direction changes and we streamline our operations, it is necessary to right-size our organization to ensure we are equipped for the future," the company said in a statement on Tuesday, without revealing the magnitude of the new layoffs. Read more.
Bed Bath & Beyond Inc. has brought on turnaround consultant AlixPartners as its new restructuring adviser as the troubled home-goods retailer prepares for a likely bankruptcy, WSJ Pro Bankruptcy reported. The company has also been working with law firm Kirkland & Ellis LLP and investment banker Lazard Ltd. on restructuring efforts, and last week said it is considering all options including a bankruptcy filing to battle its declining cash and dropping revenue. AlixPartners replaced Berkeley Research Group LLC, a consulting firm Bed Bath & Beyond had been working with since the middle of last year. A representative for Bed Bath declined to comment on AlixPartners’s hire and added that it has a team “internally and externally with proven experience in helping companies successfully navigate complex situations and become stronger.” BRG was brought on in June to help Bed Bath improve its cash and inventory levels and balance sheet. The retailer secured $375 million in loans in August to shore up its cash position and help pay down some existing debt. The company planned to reduce its spending by cutting $150 million in capital expenditures for fiscal 2022. The loans provided by Sixth Street Partners helped pad its liquidity and assuage vendors’ concerns about the retailer’s ability to pay them. The company went on a roadshow in the fall to convince vendors not to tighten payment schedules on goods shipments.
Party City Holdco Inc. has sought funding for a potential chapter 11 bankruptcy, Bloomberg News reported. The company, which is preparing to enter bankruptcy protection within weeks, is sharing information with potential providers of debtor-in-possession financing, said the people, who asked not to be identified because the matter is private. Rockaway, N.J.-based Party City has been negotiating with a creditor group that includes Capital Group Cos Inc. and Silver Point Capital ahead of the potential filing, Bloomberg reported. Known for selling balloons and other festive supplies, Party City has been squeezed by a higher costs of goods and shipping as well as a helium shortage. Sales during the critical Halloween period disappointed investors. The retailer has been getting advice from Moelis & Co. and law firm Paul Weiss Rifkind Wharton & Garrison.
Crypto exchange FTX will ask a U.S. bankruptcy court on Wednesday to allow it to auction off pieces of its business and to keep customer names secret for at least six months while it works to recover funds lost in what was allegedly a huge fraud, Reuters reported. FTX will ask U.S. Bankruptcy Judge John Dorsey in Delaware to approve procedures for selling affiliates LedgerX, Embed, FTX Japan and FTX Europe as a way of raising funds for customers, who have lost potentially billions of dollars. FTX's founder, Sam Bankman-Fried was indicted on two counts of wire fraud and six conspiracy counts last month in Manhattan federal court for allegedly stealing customer deposits to pay debts from his hedge fund, Alameda Research, and lying to equity investors about FTX's financial condition. He has pleaded not guilty. The four companies FTX intends to sell are relatively independent from the broader FTX group, and each has its own segregated customer accounts and separate management teams, according to FTX court filings. The crypto exchange has said it is not committed to selling any of the companies, but that it received dozens of unsolicited offers. FTX expects to generate additional bids by scheduling auctions in February and March. The U.S. Trustee, a bankruptcy watchdog that is part of the Department of Justice, has opposed selling the affiliates before an extensive investigation can be done into the extent of the FTX fraud allegedly carried out by Bankman-Fried.
Sullivan & Cromwell LLP, the law firm FTX tapped to steer it through bankruptcy, is facing scrutiny from federal lawmakers over whether its lawyers knew about problems at the cryptocurrency exchange before the company collapsed and co-founder Sam Bankman-Fried was charged with fraud, WSJ Pro Bankruptcy reported. A bipartisan group of U.S. senators said in a letter Monday that Sullivan & Cromwell should disclose whether its lawyers suspected fraud at FTX or had concerns about the company’s lacking appropriate legal controls before it filed for chapter 11 in early November. Law firms seeking to work in chapter 11 are required under bankruptcy rules to disclose any past representations that could pose a conflict of interest before they can be officially retained. Sullivan & Cromwell worked for FTX before its collapse, charging more than $8.5 million in legal fees before the bankruptcy, according to the law firm’s retention application. Companies commonly use existing law firms to handle bankruptcy filings, but the arrest of Mr. Bankman-Fried and other former FTX executives has drawn lawmakers’ attention to Sullivan & Cromwell’s prior work for the exchange. Four U.S. senators cited their concerns with the law firm in a letter urging Judge John Dorsey of the U.S. Bankruptcy Court in Wilmington, Del., who is overseeing the FTX case, to appoint an independent examiner to review how and why FTX failed.
Voyager Digital won court approval to sell its crypto platform to Binance.US for $20 million as part of Voyager’s plan to liquidate in bankruptcy, Bloomberg News reported. Under terms of the deal, about $1 billion worth of assets that Voyager holds on behalf of customers would be taken over by Binance, which will then give account holders the option to cash out. The deal cannot close until U.S. Bankruptcy Judge Michael E. Wiles approves the related bankruptcy liquidation plan. Customers will have the right to vote on the Binance deal in the coming weeks when they are asked to consider supporting the liquidation plan, Voyager lawyer Christine A. Okike said during a court hearing held by telephone yesterday. Judge Wiles overruled objections from federal regulators and a handful of states, which questioned whether Binance was financially stable enough to close the proposed transaction and how the company would fulfill its pledge to cash out customers. Once minor wording changes are made, Wiles said he would sign a final order allowing Voyager to enter a contract with Binance and to send creditors an outline of the deal and the liquidation plan for a vote.
Bed Bath & Beyond Inc.’s faster-than-expected decline toward bankruptcy happened in large part because suppliers began to ask for increasingly stringent payment terms and credit requirements heading into the pivotal holiday shopping season, Bloomberg News reported. The cash-strapped retailer sometimes struggled to meet those demands, said the people, who asked not to be identified discussing private information. Other suppliers, worried about the financial future of one of the largest U.S. home-goods retailers, halted shipments altogether. The result was fewer products on the shelves just as consumers were looking to spend more. The paucity of products accelerated a vicious cycle that Bed Bath & Beyond is still trapped in, with no clear way to escape: It’s unable to get the products it needs to sell to the falling number of shoppers who have continued to visit its 900 or so stores across the U.S. Unable to find what they want, many consumers have stopped going to Bed Bath & Beyond, leading to an even greater drop in sales. That decline has made it harder to pay suppliers.
Former FTX engineering chief Nishad Singh met with federal prosecutors in a bid to become the third member of Sam Bankman-Fried’s inner circle to seek a cooperation deal in the fraud case over the cryptocurrency exchange’s collapse, Bloomberg News reported. Singh, who has not been accused of wrongdoing, attended a so-called proffer session last week at the Southern District of New York U.S. Attorney’s Office, according to people familiar with the matter. At such meetings, individuals are usually granted a limited immunity to share what they know with prosecutors. A proffer session doesn’t automatically lead to a cooperation agreement. Prosecutors must weigh the value of Singh’s information before deciding whether to offer him a deal that could see him plead guilty and cooperate in exchange for possible leniency. A Singh cooperation deal would leave Bankman-Fried, who pleaded not guilty to eight criminal counts last week, increasingly isolated. Caroline Ellison, who was the chief executive of FTX’s hedge fund arm Alameda Research, and Gary Wang, FTX’s co-founder, have pleaded guilty to fraud charges and are working with authorities.
United Furniture Industries Inc. has filed for chapter 11 protection in an attempt to avoid an involuntary liquidation sought by its largest creditor, Wells Fargo & Co., the Winston-Salem (N.C.) Journal reported. Separately, United has filed its response to Wells Fargo's petition, saying it is "founded upon false and misleading statements" and is "premised on inaccurate and grossly misleading allegation." Both motions were filed in the Northern District of Mississippi. Federal bankruptcy Judge Selene Maddox set a 10 a.m. Friday hearing on the chapter 11 corporate restructuring motion. Maddox did not conduct a hearing Friday into the chapter 7 liquidating motion. United made promotional- to mid-priced upholstered furniture in the U.S. under its brand and the Lane Home Furnishings brand. The manufacturer also imported wooden bedroom and dining furniture. The United motions are the first formal legal response from United since it unexpectedly shut down on Nov. 22.
