After slow holiday sales and lower-than-expected sales during the third quarter of 2022, Bed, Bath & Beyond (BB&B) has closed an additional 130 locations after closing some earlier in 2022. Struggling with their creditors and being able to get more products into their stores, the home goods retailer may have to seek Chapter 11 bankruptcy protection to avoid a total shutdown, a situation not unfamiliar to many Idaho businesses.
The company has not officially announced that it will file for Chapter 11 protection, but most people in the financial sector have already started preparing. BB&B stock prices have dropped considerably already, causing even more financial hardships for the retailer.
Chapter 11 bankruptcy may allow the company to continue to operate
Part of the benefits of Chapter 11 bankruptcy is that it will allow the company to continue to operate while it is restructuring its debt. For many businesses, bankruptcy protection is just what they need to get their operations back in order.
For BB&B, however, restructuring may be a little more complicated. Creditors of the company will place stringent terms on any merchandise they provide because it will all be on credit, not COD which is how many businesses buy new merchandise while they are under bankruptcy protection.
Chapter 11 Bankruptcy can help businesses of all sizes
The protections offered by Chapter 11 bankruptcy are not reserved only for mega-corporations like Bed, Bath & Beyond. Any business that is facing a debt problem and believes it can benefit from debt restructuring can seek protection under this chapter of bankruptcy.
Filing for bankruptcy protection does not mean you have to shut down your business. Protections offered by Chapter 11 can help ensure the business’s longevity by allowing it to restructure debts and move forward.