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Bankruptcy Judge David Jones declined to appoint an equity committee in Revlon Inc.'s bankruptcy, rejecting a minority shareholder demand for a greater say in the cosmetics company's restructuring, Reuters reported. Judge Jones said that shareholder interests were already represented in the bankruptcy by Revlon, majority shareholder MacAndrews & Forbes, and the minority shareholder group led by investment advisor Mittleman Brothers LLC, which is free to continue advocating for shareholders on an unofficial basis. Equity committees are only rarely appointed in bankruptcy cases, and Judge Jones ruled that the cost of appointing a committee outweighed its likely value. If an official equity committee were appointed, Revlon would have to pay its attorneys and professionals at a time when its resources are already stretched, Judge Jones said. The minority shareholders' attorney, Gregory Pesce, argued yesterday that an equity committee was the best way to give a voice to the "little guys," retail stockholders who had invested in Revlon's future. The minority shareholders group pointed to increases in Revlon's share price after the company filed for chapter 11, saying Revlon was more than a so-called meme stock fueled by irrational retail investors and social media buzz. Revlon had opposed the appointment of an equity committee, and its attorney Kyle Kimpler said the company's shareholders "cannot possibly" prove that they are entitled to a meaningful payout at this stage in the bankruptcy. The company must pay $3.5 billion in debt before shareholders are entitled to a recovery, Kimpler said. Revlon's lenders also opposed the minority shareholder request, saying that recent stock price fluctuations were "untethered from market realities."

Bed Bath & Beyond Inc. selected asset manager Sixth Street Partners to supply new financing as doubts remain among vendors and some investors about the company’s turnaround prospects, the Wall Street Journal reported. Sixth Street is in exclusive talks with Bed Bath & Beyond and is nearing final terms for a loan of close to $400 million to shore up the troubled retailer’s liquidity, according to people familiar with the matter. Negotiations to finalize the loan documents are ongoing. The company told prospective lenders it had selected a proposal for an asset-based loan, A loan deal would help refill the company’s coffers and give confidence to vendors that Bed Bath & Beyond can pay its bills. The business has sought to stretch payments to some vendors, which have been pulling credit to the company in recent weeks amid mounting doubts that it could pay them back and a shortage of credit insurance. At least one firm that finances suppliers has stopped providing credit on shipments to Bed Bath & Beyond, the Journal has reported. The loan is structured as a first-in-last-out facility, meaning it is backed by collateral but will only be paid out after other secured debt in the event of bankruptcy, the people said. Sixth Street Partners manages $60 billion in assets, and has a retail lending practice that has made loans to retailers such as J.C. Penney Co. and DSW Inc.

Supply chain bottlenecks and labor shortages have been a major factor driving inflation in the U.S., though surging consumer demand ultimately did more to drive up prices in the last two years, according to researchers at the Federal Reserve Bank of New York, the University of Maryland and Harvard University, the New York Times reported. In a blog post on Wednesday, Julian di Giovanni, the head of climate risk studies in the New York Fed’s Research and Statistics Group, summarized findings from a paper presented in June that found higher consumer demand for all types of products during the pandemic was responsible for roughly 60 percent of the inflation in the United States between 2019 and 2021. Supply shocks — which include shortages of workers, raw materials and shipping containers needed to produce and move goods globally — accounted for the remaining 40 percent of inflation in the model, with 58 of 66 industrial sectors that the research identified experiencing supply constraints. The researchers concluded that, without supply bottlenecks, inflation in the United States would have been 6 percent at the end of 2021, instead of 9 percent. The research finds that demand shocks played a larger role in explaining inflation in the United States, whereas supply chain bottlenecks have done more to fuel inflation in Europe. “The bottom line of this decomposition is that supply constraints magnified the impact of higher demand in inflation,” Mr. di Giovanni wrote. The findings provide one answer to a debate that policymakers and politicians have been wrestling with about the nature of inflation, which slowed slightly to 8.5 percent in July. While many economists point to the government’s generous spending to support Americans during the pandemic as a key factor fueling inflation, the Biden administration has often blamed global supply chain issues and rising fuel prices stemming from the Russian invasion of Ukraine. The debate has important implications for the actions policymakers can take to fight price increases. The Federal Reserve has aggressively raised interest rates to try to cool consumer demand and the economy, but it has no tools to alleviate supply constraints.

Bed Bath & Beyond Inc. has found a financing source to shore up its liquidity as it tries to weather recent missteps, the Wall Street Journal reported. The company on Tuesday told prospective lenders that it has selected a lender to provide a loan following a marketing process conducted by JPMorgan Chase & Co. A loan deal would provide liquidity and give vendors confidence they can continue to ship goods to Bed Bath & Beyond, which is fighting to correct missteps from an ill-fated push into private-label brands. The retailer had been seeking about $375 million to pad its cash levels and help pay down existing debt, the Wall Street Journal previously reported. The size and terms of the final deal weren’t immediately clear on Tuesday. The company’s shares skyrocketed last week on a burst of interest from individual investors but have been sliding since billionaire activist Ryan Cohen announced his exit from the stock and sold off his 10% stake. The falling share price narrowed the options available to Bed Bath & Beyond to build liquidity, stanch its cash bleed and ensure continued shipments from suppliers. The company has signaled it has to raise cash. While it has said it should be fine for a year, its business remains in decline. The company used up more than $500 million in cash in the latest quarter ended in May.

Revlon Inc. told the judge overseeing the cosmetics giant’s bankruptcy that shareholders don’t need a special, company-funded committee to represent them in the chapter 11 case because there is no evidence the equity is worth anything, Bloomberg News reported. The company urged U.S. Bankruptcy Court Judge David S. Jones in Manhattan to reject the request from minority equity owners in part because low bond prices imply that equity has little hope of recouping anything. The committee representing unsecured creditors also asked Judge Jones to reject a shareholder committee. “Revlon stock trading has all the outward appearances of a so-called ‘meme’ stock,” the committee said in its objection, referring to shares that rise in value only because of Internet chatter, not economic reason. Revlon shares tumbled as much as 34% to as low as $5.62 Monday before rebounding to around $8.31, leaving it down some 2% on the day. That price is up from as little as $1.17 in June. Nearly all official committee are appointed by the Office of the U.S. Trustee, an arm of the U.S. Justice Department that acts as a watchdog in corporate bankruptcies. In the Revlon case, the office appointed the unsecured creditor committee, but last month rebuffed the shareholders. The shareholder group, which owns 4.7% of Revlon’s common stock, asked Judge Jones on Aug. 9 to order the U.S. Trustee to appoint a panel. On that day the shares closed at about $8.

In August 2019, Hasbro Inc. announced it was paying about $4 billion to acquire Entertainment One (eOne), the Canadian media company best known for the kids’ TV series “Peppa Pig” and “PJ Masks.” Hasbro’s then-Chief Executive Officer, Brian Goldner, was on a mission to transform the toy company that makes Transformers action figures and G.I. Joe dolls into a global entertainment studio that also makes movies and TV shows. Goldner had previously held talks to buy DreamWorks Animation (home of “Shrek”) and Lions Gate Entertainment Corp. (“The Hunger Games”) but had been unable to seal a deal. eOne, which began as a Canadian music distributor in the early 1970s, is a hodge podge of assets. It owns stakes in several production companies, including Steven Spielberg’s Amblin, and produces dozens of films and TV shows such as “Yellowjackets.” It also distributes movies in foreign territories. In the two and a half years since the deal closed, almost everything that could go wrong has gone wrong, Bloomberg News reported. A global pandemic halted production and closed movie theaters, Goldner died at the age of just 58 and an activist investor acquired a stake in Hasbro and started agitating for some changes. Hasbro fought off the activist, and is now conducting a strategic review and reassessing its entertainment strategy. While the company is still committed to “branded entertainment” — aka more “Transformers” movies — it now feels there are large parts of eOne’s business that don’t fit into its future. Hasbro is weighing two options, according to several people familiar with its plans. It can take the existing staff and redirect it to make branded entertainment (think “Peppa Pig” movies), and shut down work on projects like “Yellowjackets” and “Designated Survivor.” Or it can sell everything it doesn’t want. It already sold the music company, which owned Death Row Records, for $385 million.

Meme stock influencer Ryan Cohen is sending Bed Bath & Beyond stock plummeting. Shares of the badly struggling retailer cratered 45% in pre-market trading on Friday as it was disclosed late Thursday Cohen's RC Ventures sold his entire position in Bed Bath & Beyond. Cohen, who is also the chairman of GameStop, had about an 11.8% stake in the company, YahooFinance.com reported. Cohen's exit caps off an otherwise crazy week of trading for a retailer not too far away from entering a grave alongside Sears, Kmart, Borders, and Circuit City. Bed Bath & Beyond stock skyrocketed by nearly 70% in intraday trading on Tuesday as a result of a massive short squeeze. BBBY stock finished that session up 29% in a volatile day. From Tuesday's close to prior to Cohen's disclosure after Thursday's session, shares had gained another 17%. Cohen initially disclosed a 9.8% stake in the company in March, and the recent resurgence of BBBY stock involved the meme community once again rallying together to counter institutional forces that hold opposing views on the stock and the underlying business.

U.S. retail sales stagnated last month on declines in auto purchases and gasoline prices, though gains in other categories suggested consumer spending remains resilient, Bloomberg News reported. The value of overall retail purchases was flat last month after a revised 0.8% jump in June, Commerce Department data showed Wednesday. Excluding gasoline and autos, retail sales rose a better-than-expected 0.7%. The figures aren’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for a 0.1% rise in retail sales. For many Americans, the significant pullback in gasoline prices has boosted sentiment and likely freed up cash to spend elsewhere. Even so, widespread and persistently high inflation is eroding workers’ paychecks and forcing many to lean on on credit cards and savings to keep up. That presents an enduring headwind to the resilience of consumers in the months ahead. Sales at gasoline stations fell 1.8% in July, reflecting a steady retreat in gas prices from the record highs seen in mid-June. Purchases at motor vehicle and parts dealers dropped 1.6%.

American Dream, the most expensive U.S. shopping center ever built, is behind on its bills, the Wall Street Journal reported. Its owner, Canadian mall operator Triple Five Group, failed to make a quarterly $125,000 payment that was due on Aug. 1 to East Rutherford, N.J., according to the town’s mayor. It is the second time the developer has been late on the payment-in-lieu-of-taxes. The owner of the sprawling shopping center and entertainment complex, located across the Hudson River from Manhattan in East Rutherford, hoped to redefine the mall experience when it opened in 2019 after a cost of $6 billion. It was the first mall in the U.S. to devote more space to entertainment, restaurants and theme-park rides than to traditional retail, part of an ambitious effort to lure younger shoppers away from their screens and to the complex. Its nearly 90-acre site includes a 16-story indoor ski hill, a roller coaster, as well as a water park with a steep slide that rises 14 stories high. Triple Five Group has found it challenging to make the project financially viable. The mall was closed for six months as a result of the Covid-19 pandemic, and it continues to struggle even as foot traffic to the complex picks up.