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PSZJ’s Representation of Plan Administrator in Bed Bath & Beyond Bankruptcy Covered in Reorg
Reorg recently covered the firm’s involvement in the chapter 11 bankruptcy of Bed Bath & Beyond in an article entitled "Pro Se Equityholders Denied Motion for Stay Pending Appeal of Bed Bath & Beyond Confirmation Order; Judge Warns of Potential Sanctions for ʻFrivolousʼ Arguments.”
During a hearing on October 31, 2023, Judge Michael Kaplan denied a motion by two Bed Bath & Beyond former equityholders to stay the company’s plan of reorganization pending their appeal of plan confirmation. On appeal, the former equityholders argue that the plan is not “fair and equitable” because their shares were canceled prior to being returned to the debtors.
The article cites Hayley Winograd’s presentation of the plan administrator’s objection to the stay motion. As argued by Ms. Winograd, canceled shares cannot be “uncanceled,” outstanding stock is not estate property subject to turnover, and the former shareholders’ appeal cannot succeed because “it flows from the incorrect premise that outstanding stock is property of the debtors.”
Agreeing with Ms. Winograd, Judge Kaplan adopted the plan administrator’s arguments on the record, denied the stay motion, and said he would consider imposing sanctions on the appellants if they pursue further motion practice before the bankruptcy court.
For more information, the article can be found below (subscription required).