It’s been a rough year for shareholders of Bed Bath & Beyond (OTCMKTS:BBBYQ) stock. In April, the retailer announced that it had filed for Chapter 11 bankruptcy protection and would begin the process of winding down operations. Bed Bath also noted that it would “conduct a limited sale and marketing process for some or all of its assets” during the bankruptcy process. A successful sale would mean that the company would halt plans to close any stores as part of the transaction.
The deadline for debtors to select a stalking horse bid for some or all of Bed Bath’s assets has been set for June 1, moved from the original deadline of May 22. The stalking horse bid will set a low range of bids, meaning no one can bid below the stalking horse bid. This bid is also set in place before the actual auction and acts as a reserve bid.
Dear BBBYQ Stock Fans, Mark Your Calendars for June 1
After the stalking horse bid has been placed, buyers will have until June 7 to make a final bid. After that, the auction, if one is necessary, will take place on June 14. Following the auction, the sale objection deadline has been scheduled for June 19. This is the date when any objector must file an objection to the court. Finally, the sale hearing will take place on June 21 and involve:
“The hearing before the Court to consider approval of the successful bid or bids, pursuant to which the Debtors and the winning bidder or bidders will consummate the sale.”
The dates for the auction process have been set in stone, although it isn’t clear who, if anyone, will place a bid. However, as a name-brand legacy store with goodwill among consumers, the auction will likely draw plenty of interest… as long as the price is right.
According to The Street, stocks are typically halted or suspended during a bankruptcy sale process in order to create a fair bidding process. Bed Bath shareholders should tread water carefully, as BBBYQ stock will likely be volatile leading up to the process.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
