What We’re Reading This Week [April 27, 2023]
Bed Bath & Beyond, the home goods retailer, has filed bankruptcy under Chapter 11 and plans to conduct liquidation sales and close all of its brick-and-mortar stores by June 30, as reported by The New York Times. The retailer points to an inability to adjust to the growth of online shopping as a reason for its downfall. CNN reports that Bed Bath & Beyond’s coupon strategy, while once a contributor to its success, may have ultimately led to its downfall as customers were trained to not buy goods at full price. Bed Bath & Beyond Files for Bankruptcy l The New York Times; How coupons backfired on Bed Bath & Beyond l CNN
Another major retailer – David’s Bridal – filed for Chapter 11 on April 17, as reported by CNN. David’s Bridal hopes to sell the company as a going concern, but will pivot to a liquidation if that ultimately proves unsuccessful. David’s Bridal had previously exited bankruptcy in January 2019. The CEO has assured customers that the wedding attire retailer will fulfil every order, as reported by Yahoo! Finance. One in four brides wear David’s Bridal to their wedding. Now, its filing for bankruptcy l CNN; David’s Bridal CEO: Brides will still get their wedding dresses amid bankruptcy filing / Yahoo! Finance
WSJ Bankruptcy reports that, following UBS’s rescue of Credit Suisse last month, certain bondholders have sued Swiss regulators, seeking to challenge the Swiss government’s determination that $17 billion in Additional Tier 1 bonds could be wiped out as part of the rescue. Typically, shareholders in a bank or company take the first losses before any creditors lose money. However, Credit Suisse’s shareholders are receiving $3 billion in UBS stock as part of the transaction. Credit Suisse Investors Challenge Switzerland’s $17 Billion Bond Write-Down l The Wall Street Journal
Johnson & Johnson’s subsidiary, LTL Management LLC (LTL) re-filed for chapter 11 relief less than two weeks after the Third Circuit denied LTL’s motion to reconsider its decision that dismissed LTL’s initial bankruptcy filing as made in bad faith. In connection with the second filing, CNN reports that LTL has a $8.9 billion funding commitments from its parent ($2 billion more than when it filed for bankruptcy previously) and plan support agreements with more than 60,000 talc claimants. CNBC reports that the bankruptcy judge has temporarily stayed lawsuits against the company through mid-June. Johnson & Johnson is again trying to use bankruptcy to settle talc cases for $8.9 billion l CNN; U.S. bankruptcy judge halts 40,000 Johnson & Johnson talc and cancer lawsuits l CNBC
