Bankruptcy Deep Dive
BBBY Chapter 11 Liquidating Plan — Class Structure, Distribution Waterfall, Professional Fees, and Codebtor Analysis
In re: Bed Bath & Beyond Inc. — D.N.J. No. 23-13359
At a Glance
Liquidating Plan — Not Reorganization
BBBY's plan was a liquidating plan. Its principal operating assets were sold or liquidated, while residual causes of action and other wind-down assets remained. Bed Bath & Beyond Inc. changed its name to 20230930-DK-Butterfly-1, Inc. on September 21, 2023; the Plan became effective on September 29, 2023. Class 9 interests received no distribution and were cancelled, released, and extinguished. Holders were not entitled to vote and were deemed to reject the Plan.
Full Class Structure
The plan organized claims into 10 classes plus unclassified administrative and priority tax claims. Only two classes voted to accept. The plan was confirmed via cramdown over Class 6 objections.
| Class | Description | Treatment | Voting Status | Plan Distribution Basis |
|---|---|---|---|---|
| — | Administrative Claims (§503(b)) | Paid when allowed and due under Plan timing provisions | N/A (unimpaired) | Full allowed amount |
| — | Priority Tax Claims (§507(a)(8)) | Treatment required by §1129(a)(9)(C) | N/A (unimpaired) | Statutory treatment |
| 1 | Other Priority Claims (§507(a)) | Cash in full or other unimpaired treatment | Unimpaired — deemed to accept | Full allowed amount / unimpaired |
| 2 | Other Secured Claims | Cash, collateral, reinstatement, or other unimpaired treatment | Unimpaired — deemed to accept | Unimpaired treatment |
| 3 | DIP Claims (Sixth Street) | Paid through Waterfall Recovery | Voted to Accept | Waterfall |
| 4 | FILO Claims (Sixth Street) | Paid through Waterfall Recovery | Voted to Accept | Waterfall |
| 5 | Junior Secured Claims | Pro rata after senior claims | No identified holders | Unknown |
| 6 | General Unsecured Claims | Pro rata share of Shared Proceeds Pool | Voted — Did NOT Accept | Unknown |
| 7 | Intercompany Claims | Reinstated or otherwise addressed at Debtors' option | Deemed to accept/reject | No Plan distribution |
| 8 | Intercompany Interests | Cancelled, released, extinguished | Deemed to reject | $0 |
| 9 | Common & Preferred Equity | Cancelled, released, extinguished | Deemed to Reject | $0 |
| 10 | Section 510(b) Claims | Cancelled, released, extinguished | Deemed to Reject | $0 |
Sources: Doc 2160 (Second Amended Plan); Doc 2172 (Confirmation Order); Doc 2140 (Voting Results)
Distribution Waterfall
The plan uses a two-track waterfall structure with a sharing mechanism overlay, depending on whether proceeds derive from prepetition collateral or DIP collateral.
Track A: Prepetition Collateral
Track B: DIP Collateral (Non-Prepetition)
Sharing Mechanism — Ratios Disclosed, Realized Proceeds Unresolved
Final DIP Order ¶60 (Doc 729) discloses the thresholds and percentage splits. Before the initial threshold, the governing loan and DIP documents control. After the ABL is paid in full and DIP/FILO recover $515M plus specified interest and fees, the estate receives 20% of shipping/price-gouging proceeds, 40% of director-and-officer claim proceeds, 50% of other-liability and interchange proceeds, and 100% of non-insider preference proceeds; other collateral remains 100% lender-side. After the estate receives $25M under that stage and DIP/FILO recover $550M plus interest and fees, the estate share becomes 20% of other collateral, 35% of shipping/price-gouging proceeds, 50% of director-and-officer, other-liability, and interchange proceeds, and 100% of non-insider preference proceeds. The unresolved issue is how much each category ultimately realized.
Sixth Street Triple Position
Sixth Street-affiliated parties held financing and governance roles at three points in BBBY's bankruptcy structure.
DIP Agent (Class 3)
The authorized DIP facility totaled $240 million: up to $40 million of new money plus a $200 million roll-up. DIP Claims were first in the Plan waterfall for non-prepetition DIP collateral.
Source: Doc 10 ¶77-79; Doc 729
FILO Agent (Class 4)
The FILO facility originated at $375 million and was later amended to $475 million. The Plan allowed approximately $349.6 million plus interest, fees, and other amounts due. FILO Claims were first for prepetition collateral proceeds.
Source: Doc 10 ¶46
Oversight Committee
Ari Mazo of Sixth Street served on the Oversight Committee, giving Sixth Street governance visibility into post-effective plan administration.
Source: Doc 2161 (Amended Plan Supplement)
What This Means
Sixth Street-affiliated parties occupied roles in the two senior financing classes and had representation through the FILO lenders' Oversight Committee appointee. Both classes voted to accept the Plan; Class 6 general unsecured creditors did not accept, and the Plan was confirmed through section 1129(b). These overlapping roles show concentrated financial and governance influence, not an adjudication of legal control or misconduct.
Professional Fee Orders and Filed Requests
Total confirmed debtor-side professional fees: $19,913,709.52 (Doc 2729, Exhibit A). Committee-side final applications are shown separately; a filed request is not labeled approved unless an approval order is in the reviewed corpus.
| Professional | Role | Amount Shown | Status | Source |
|---|---|---|---|---|
| Kirkland & Ellis (K&E) | Debtor Lead Counsel | $13,721,266.40 | Approved | Doc 2656; Doc 2729 |
| Cole Schotz | Debtor Co-Counsel | $2,550,719.30 | Approved | Doc 2729 |
| Kroll Restructuring Administration LLC | Debtor Administrative Advisor | $106,759.80 | Approved | Doc 2650; Doc 2729 |
| Lazard Frères & Co. LLC | Debtor Investment Banker | $796,362.75 | Approved | Doc 2652; Doc 2729 |
| Jones Lang LaSalle Americas, Inc. | Debtor Real Estate Advisor | $449,719.00 | Approved | Doc 2653; Doc 2729 |
| Deloitte Tax LLP | Debtor Tax Advisor | $953,419.27 | Approved | Doc 2654; Doc 2729 |
| A&G Realty Partners, LLC | Debtor Real Estate Advisor | $1,335,463.00 | Approved | Doc 2655; Doc 2729 |
| Pachulski Stang Ziehl & Jones LLP | Committee Counsel | $2,659,287.79 | Filed Request | Doc 2687; Doc 2740 certification/proposed order |
| Alvarez & Marsal | Financial Advisor | $3,260,000.95 | Filed Request | Doc 2682 |
| Gibbons P.C. | Committee Co-Counsel | $180,031.50 | Filed Request | Doc 2686 |
| ASK LLP | Special Counsel to UCC | $60,560.00 | Filed Request | Doc 2681 |
The seven debtor-side rows above sum to the $19,913,709.52 allowed by Doc 2729. The committee applications are image-only PDFs, but their filed totals are legible and were manually verified: PSZJ requested $2,638,974.00 in fees plus $20,313.79 in expenses; A&M requested $3,250,148.00 plus $9,852.95; Gibbons requested $179,833.50 plus $198.00; ASK requested $60,560.00 with no expenses. Signed approval orders for those four committee-side requests are not in the reviewed corpus. The separate Fee Explorer indexes 32 authenticated monthly statements; comparison fees should not be treated as cash-paid or final-approved amounts.
Asset Sales & IP Transfers
The two principal IP-sale prices were publicly disclosed. The remaining question is how the headline consideration translated into net estate proceeds and distributions.
| Asset | Buyer | Price | Date | Source |
|---|---|---|---|---|
| Bed Bath & Beyond IP/Brand | Overstock.com, Inc. | $21.5M cash | Jun 28, 2023 | Doc 1117; SEC 8-K |
| buybuy BABY IP/Brand | Dream On Me parties | Approx. $15.5M + assumed liabilities | Jul 11, 2023 | Doc 1314; SEC 8-K |
| Store Inventory (Liquidation) | Various (store closing sales) | Unknown aggregate | Jun–Jul 2023 | Doc 641 |
| Lease Portfolio (Phase 1 + 2) | Various lease purchasers | Unknown aggregate | May–Jul 2023 | Doc 422 |
Public Sale Prices — Net-Proceeds Reconciliation Remains
The two IP transactions disclosed approximately $37.0 million in aggregate cash consideration before adjustments: $21.5 million from Overstock, subject to escrow conditions, and approximately $15.5 million from the Dream On Me parties, plus assumed liabilities. Those headline prices do not establish the cash ultimately available for distribution. A complete waterfall still requires closing and escrow records, transaction costs, taxes, other asset-sale proceeds, secured-debt paydowns, and wind-down expenses. The evidence gap is the reconciliation to net estate proceeds, not the IP purchase prices.
Cohen Codebtor Analysis
BBBY's Schedule H (Doc 568, 1,176 pages) lists Ryan Cohen and RC Ventures LLC as codebtors on the same 13 unique creditor entries. Source: Filed May 30, 2023.
Securities Class Action (SI v. BBBY)
Cohen, RC Ventures, Sue Gove, and JPMorgan Securities are listed as codebtors on the Pengcheng SI securities-class-action entry (Schedule H entries 2.622–2.641). The bankruptcy stayed claims against BBBY; it did not dismiss BBBY from the case. These debtor-filed Schedule H entries record asserted codebtor relationships but do not adjudicate liability.
Judith Cohen Lawsuit (Separate Individual Action)
Cohen and RC Ventures are listed as codebtors on a separate Section 16(b) short-swing-profit action — Cohen, Judith v. Ryan Cohen, RC Ventures, and Bed Bath & Beyond Inc. (S.D.N.Y. Case No. 22-CV-09733). The action was consolidated and later closed after the lead-case claims were dismissed as moot. It named Cohen and RC Ventures but not Gove or JPMorgan.
Municipal Mapping Anomaly
Cohen and RC Ventures also appear as codebtors on 11 municipal creditor entries. The clustering of different defendant groups in contiguous alphabetical blocks of "City of" creditors supports treating these entries as an apparent Schedule H mapping anomaly, not evidence of municipal legal relationships. The reviewed record does not establish whether the anomaly originated with Kroll, the Debtors' source data, or another preparation step. The SI and Judith Cohen entries correspond to identifiable litigation, but the Schedule H labels themselves do not adjudicate liability.
Docket Gaps & Missing Documents
These are priority unresolved records in the local research corpus as reviewed August 12, 2026. “Not obtained” describes this corpus, not necessarily the full public docket.
| Priority | Document | Status | Impact |
|---|---|---|---|
| P1 | Debtors' Reply to Confirmation Objections | Not Obtained | Would address Safety National objection (Doc 2099) |
| P1 | IP-sale closing statements, escrow releases, and estate funds-flow records | Partially Documented | Needed to reconcile approximately $37.0M in disclosed cash consideration to net distributable proceeds |
| P2 | Committee-side fee approval orders | Not Obtained | PSZJ, A&M, Gibbons, and ASK filed totals are verified; signed approval orders would confirm amounts allowed |
| P2 | Claims register and relevant proofs of claim | Not Obtained | Need Cohen/RC Ventures proofs of claim |
| P3 | 341 meeting transcript | Not Obtained | May contain admissions re: buybacks, JPMorgan |
| P3 | Post-effective date Plan Administrator reports | Not Obtained | May indicate DK Butterfly authorization |
| P3 | SEC proof of claim | Not Obtained | Whether SEC asserted claim in bankruptcy |
Cross-Case Connections
The bankruptcy intersects with both active litigation matters through shared actors, preserved evidence, and structural outcomes.
Bankruptcy → DK Butterfly
- Renamed entity (DK Butterfly) is the plaintiff in §16(b) action
- Plan Administrator Goldberg administers post-effective litigation for the wind-down estate
- Class 9 equity cancellation confirms zero shareholder recovery
- Transfer restrictions during case may affect share-count calculations
Bankruptcy → SI v. BBBY
- Chapter 11 filing stayed claims against BBBY; Cohen and RC Ventures remain active defendants
- Zero equity recovery establishes the Plan treatment of equity, not securities-law damages or loss causation
- DIP/FILO priority shaped the bankruptcy waterfall but does not by itself establish litigation causation
- Schedule H records debtor-scheduled codebtor relationships; it does not adjudicate liability
| Actor | Bankruptcy Role | Litigation Role |
|---|---|---|
| Ryan Cohen / RC Ventures | Exited pre-bankruptcy: 7.78M common shares sold for about $178.0M gross, plus 16,701 call contracts; about $189.3M combined gross proceeds | Defendant in both DK Butterfly & SI cases |
| JPMorgan Chase | Prepetition ABL agent ($1.13B facility) | Subpoenaed in DK Butterfly; JPMorgan Securities was voluntarily dismissed from SI |
| Sixth Street Partners | FILO/DIP administrative-agent roles; FILO appointee represented on Oversight Committee | No direct litigation role established; financing structure affects estate-recovery analysis |
| Michael I. Goldberg | Plan Administrator (wind-down) | Administers DK Butterfly litigation on behalf of the estate |
| Sue Gove | CEO during filing; First Day declarations | Dismissed from SI case; deposed re: Cohen |
Key Bankruptcy Dates
Chapter 11 Petition Filed
Case No. 23-13359 (D.N.J.). 739,056,836 common shares outstanding. Holly Etlin CRO/CFO provided 93-page First Day Declaration (Doc 10).
Interim DIP Financing Order
The Court entered interim authorization for the DIP facility; the financing contemplated up to $40 million of new money plus a $200 million roll-up. The final order followed on June 15, 2023 (Docs 71 and 729).
Final DIP Financing Order
The Court entered the Final DIP Order for the $240 million authorized facility and its sharing mechanism (Doc 729).
Overstock IP Sale Approved
Bed Bath & Beyond brand and related IP sold to Overstock.com for $21.5 million cash, with a portion subject to escrow conditions (Doc 1117; SEC 8-K).
Dream On Me IP Sale Approved
buybuy BABY brand and related IP sold to the Dream On Me parties for approximately $15.5 million plus assumed liabilities (Doc 1314; SEC 8-K).
Plan Confirmed via Cramdown
Class 6 (GUC) voted to reject; plan confirmed over objection. Classes 9 and 10 deemed to reject. Doc 2172.
Corporate Name Change
Bed Bath & Beyond Inc. changed its name to 20230930-DK-Butterfly-1, Inc. during the wind-down.
Effective Date
The Plan became effective. Class 9 interests were cancelled with no distribution, and the Plan Administrator-led wind-down began.
Fee Approval Order
$19,913,709.52 in debtor-side professional fees and expenses received final allowance (Doc 2729).