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Bed Bath & Beyond Inc.’s white knight might be a hedge fund, but the rescue wouldn’t have happened if it wasn’t for the meme traders who made the logic behind the deal possible, WSJ Pro Bankruptcy reported. Even as Bed Bath & Beyond tumbled toward what seemed like a sure bankruptcy — shutting down stores, missing interest payments and having its credit lines frozen — retail investors continued to bet that the iconic home-goods retailer could defy the odds and survive to eke out some equity value. Even though they lacked the sustained, gravity-defying heights that the shares of GameStop Corp. and AMC Entertainment Holdings Inc. enjoyed during their meme-stock heydays, Bed Bath & Beyond’s shares have traded at high volumes and have repeatedly delivered meme-driven spikes in the past month. For Hudson Bay Capital Management LP, the $19 billion Greenwich, Conn.-based hedge fund that gave Bed Bath & Beyond an 11th-hour lifeline this week, the liquidity provided by the actively traded market for the stock means that the hedge fund will likely have options to monetize its position, so long as the retailer’s business operations don’t melt down further and its shares plunge to penny-status. It is rare for a distressed company to obtain a last-minute rescue via an equity raise, as it is much riskier to invest in a troubled company by buying stock that, unlike a senior loan, doesn’t have a claim on collateral. Even while it teetered on the brink of bankruptcy, AMC bagged a ton of meme money by selling shares as its star rose on social media, though the movie-theater chain never came as close to chapter 11 as Bed Bath & Beyond did by actually missing bond payments. Bed Bath & Beyond on Tuesday priced its equity offering led by Hudson Bay and some other investors, in which the investors provided $225 million upfront and are committed for another $800 million over the next 10 months granted that the company meets certain conditions, such as satisfying its debt obligations. Bed Bath & Beyond plans to use some of the proceeds to repay its revolving credit line and to help build back its inventory, according to a securities filing.

Brazilian hedge fund manager SPX Capital is among asset management firms taking the lead in a group of local bondholders of troubled retailer Americanas SA organizing for restructuring negotiations, Bloomberg News reported. SPX, XP Asset Management, Riza, Icatu Vanguarda, Prada, Moneda and Exes were appointed as members of the committee that will represent a group of holders of the firm’s domestic debt, according to a document reviewed by Bloomberg. The group also approved hiring law firm E.Munhoz Advogados as its legal adviser, according to minutes from a Feb. 6 meeting. Americanas filed for bankruptcy protection last month, just days after finding 20 billion reais ($3.9 billion) of “accounting inconsistencies” that artificially boosted its profits and reduced reported liabilities. SPX, one of Brazil’s largest independent hedge fund managers with over 76 billion reais in assets, hired Albano Franco from Banco BTG Pactual’s asset-management unit in 2019 to build out its credit venture. Earlier this week, another Brazilian hedge-fund power house — Verde Asset Management — said it was stung by the rout in Americanas’ local notes. The firm said exposure to local bonds brought a 14 basis-point loss to its flagship fund last month, trimming January gains to 2.7%. 

Hudson Bay Capital Management is the anchor investor of the share sale launched Tuesday by Bed Bath & Beyond to stave off bankruptcy, Bloomberg News reported. The embattled retailer lined up investors for an eleventh-hour cash infusion that would allow it to keep operating outside of chapter 11 protection, Bloomberg previously reported. Hudson Bay, a New York-based multi-strategy hedge fund, comprised the largest order among several institutional investors that helped Bed Bath & Beyond enter into the transaction Tuesday, said the people, who asked not to be named discussing private company information. B. Riley Securities Inc. arranged the deal. The company gathered orders from institutional investors to cover the full offering, which will ultimately raise more than $1 billion. Bed Bath and Beyond also worked with advisers from Kirkland & Ellis, Lazard and AlixPartners.

Pet-care retailer Independent Pet Partners Holdings LLC filed for bankruptcy, seeking to sell some of its stores to its top lenders, WSJ Pro Bankruptcy reported. The Woodbury, Minn.-based company filed for chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del., on Sunday, blaming a sudden change in consumers’ pet food preference and the COVID-19 pandemic for lost revenue. Founded in 2017, the company has expanded its footprint by acquiring regional pet-store chains. The portfolio spans about 160 stores in a dozen states across the nation, under the banners Chuck & Don’s, Kriser’s Natural Pet, Natural Pawz and Loyal Companion, according to court papers. The company generated about $220 million in net sales in 2022. As of the petition date, it had about $182 million in assets and about $215 million in liabilities, according to the filing. It recorded about $111.4 million in secured debt. The company said its focus on grain-free, high-protein dog food caused it to lose about $10 million in sales in the second half of 2019 because pet owners stopped buying that type of product after reading reports that the food could cause dilated cardiomyopathy, a potentially fatal heart disease in dogs, according to the declaration filing by Stephen Coulombe, co-chief restructuring officer of the company. The filing said the U.S. Food and Drug Administration hasn’t established a causal relationship between grain-free diets and the disease.

Bed Bath & Beyond Inc. said on Monday it was planning to raise some $1 billion through an offering of preferred stock and warrants in a last-ditch effort to stave off bankruptcy, Reuters reported. The home goods retailer said in securities filings that if it can't complete the complex transaction, it would "likely file for bankruptcy protection." The chain has said in recent weeks that it had defaulted on a loan and may not be able to remain in business, raising concerns about its future. Bed, Bath & Beyond held talks in recent days with an investment firm to underwrite a significant portion of the proposed offering. Bed Bath said it was planning to raise just over $1 billion through sales of preferred stock and warrants and from securities when the warrants are exercised. Bed Bath will receive a waiver on its recent bank default should the proposed offering succeed, the company said. The embattled retailer said it would use the proceeds of the offering to repay outstanding revolving loans which it would then use to make an interest payment on bonds it missed on February 1. It also plans to draw an additional $100 million from a first-in-last-out loan from investment firm Sixth Street, that takes priority for repayment in a possible bankruptcy.

Former Bed Bath & Beyond Inc. employees say they haven’t been paid promised severance, the latest sign of the worsening financial squeeze at the home-goods retailer, Bloomberg News reported. Some former employees received an email on Jan. 26 from the human resources department that read, in part: “We are reaching out to you to inform you that there has been a delay with your payment,” according to copies viewed by Bloomberg News. “We recognize the challenges this may cause and appreciate your patience as we work to provide an update.” Former staffers who raised concerns about their severance pay in recent days received an additional email. They asked not to be identified out of concern it would jeopardize their payments. “We are working to provide you with an update, and we are aiming to be back in touch by Wednesday, February 8,” the message said. The email didn’t explain the significance of that date. The delayed payments underscore the mounting financial distress for one of the largest home-goods retailers in the US. On Wednesday, the company confirmed it missed interest payments on its bonds. Last week, Bed Bath & Beyond received a default notice from its loan agent, JPMorgan Chase & Co., warning that it didn’t have enough funds to make payments.

Bed Bath & Beyond Inc. missed interest payments on its bonds, a week after its bank lenders sent the company a default notice because it was overdrawn on its credit lines, WSJ Pro Bankruptcy reported. The home-goods retailer failed to pay more than $28 million on three tranches of notes totaling roughly $1.2 billion due on Feb. 1, a spokeswoman for the company confirmed Wednesday. Last week Bed Bath reported that JPMorgan Chase & Co. determined the company defaulted after it failed to repay amounts it borrowed on its revolving credit lines. The company has $550 million in loans outstanding from banks led by JPMorgan Chase & Co. and an additional $375 million from a facility provided by Sixth Street Partners, according to a recent securities filing. The coupon miss comes nearly a month after the company raised the possibility of filing for bankruptcy and said it was running low on funds. The company has been making preparations for a chapter 11 process for weeks, including trying to raise a loan to fund its bankruptcy and lining up a buyer for its stronger business, the Buybuy Baby chain, the Journal has reported.

Bed Bath & Beyond Inc is preparing to seek bankruptcy protection as soon as this week, and has lined up liquidators to close additional stores unless a last-minute buyer emerges, Reuters reported. The timing of any bankruptcy filing was in flux Monday evening, with the U.S. home goods retailer's advisers locked in meetings exploring any remaining options to avoid it. Bed Bath & Beyond is negotiating a loan to help it navigate bankruptcy proceedings, with investment firm Sixth Street in talks to provide some funding, two of the people said. The firm loaned Bed Bath & Beyond $375 million last year. The chain, once considered a category killer in home goods like dinnerware and small appliances, has lined up liquidators who are readying store closing sales that could be launched as soon as this weekend, two of the people said. The chain has said it is closing 87 Bed Bath & Beyond stores and five buybuy BABY stores, in addition to 150 closures announced last year. It is also shutting its health and beauty discount chain Harmon.

About a year ago, the used-car business was a rollicking party. The coronavirus pandemic and a global semiconductor shortage forced automakers to stop or slow production, pushing consumers to used-car lots. Prices for pre-owned vehicles surged. Now, Americans, especially people on tight budgets, are buying fewer cars as interest rates rise and fears of a recession grow, the New York Times reported. And improved auto production has eased the shortage of new vehicles. As a result, sales and prices of used cars are falling and the dealers that specialize in them are hurting. “After a huge run-up in 2021, last year was a reality check,” said Chris Frey, senior manager of economic and industry insights at Cox Automotive, a market research firm. “The used market now faces a challenging year as demand weakens.” According to Cox, used-car values fell 14 percent in 2022 and are expected to fall more than 4 percent this year. That shift means many dealers may have no choice but to sell some vehicles for less than they paid. The industry’s difficulties have been exemplified by Carvana, which sells cars online and became famous for building “vending machine” towers where cars can be picked up. The company recently reported a quarterly loss of more than $500 million, and has laid off 4,000 employees.

Bed Bath & Beyond Inc. said Friday it was closing an additional 87 of its flagship stores and its entire Harmon chain of drugstores, as the retailer struggles to find financial support to keep its operations funded, WSJ Pro Bankruptcy reported. The latest closings are in addition to a plan announced in August to shut 150 lower-performing Bed Bath & Beyond locations, a spokeswoman said. The company said Friday it is also closing five of its Buybuy Baby stores. The company had about 50 Harmon stores as of February 2022. The company, which is expected to file for bankruptcy soon, faces limited options to reorganize as a going concern. Its lenders have cut off credit, it hasn’t secured a buyer to acquire its business, it is struggling to raise financing to survive chapter 11 even in shrunken form and many vendors have stopped shipping goods to the retailer. Discussions are continuing and a financing deal could still materialize. On Thursday, Bed Bath & Beyond said it received a default notice from JPMorgan Chase & Co., after it overdrew on its credit lines. If it doesn’t gain access to financing, the retailer might need to close all or most of its stores. Read more.

In related news, Bed Bath & Beyond Inc.’s slide toward a potential bankruptcy filing threatens to flood the retail real-estate market with hundreds of vacant stores after the company said last week it would close about 90 additional locations, the Wall Street Journal reported. But landlords who own big-box space occupied by the troubled home-goods retailer are more confident about finding new tenants than they would have been in years past, according to property owners and retail analysts. One of the bigger Bed Bath & Beyond landlords has received commitments from tenants to fill all 12 locations if and when they close, according to a person familiar with the matter, including Sephora, Trader Joe’s, Dick’s Sporting Goods Inc., T.J. Maxx, Ross Stores Inc. and HomeGoods. After years of shrinking their real-estate footprints, big-box retailers such as bookseller Barnes & Noble and discount-clothing store Burlington have shown signs of expanding again. Demand for larger retail spaces is particularly strong in the Sunbelt region, where the population has grown significantly over the last decade but very little new retail has been built since the 2008 financial crisis, said Chuck McShane, director of market analytics for the Carolinas at CoStar Group Inc. Read more. (Subscription required.)