Why Hasn’t Bed Bath & Beyond Filed for Bankruptcy Yet?

It’s out of money, closing stores by the hundreds and its business continues to be downright dismal. Its stock price keeps melting and the overall company is barely worth $300 million.

What’s the real reason Bed Bath & Beyond hasn’t filed for bankruptcy yet?

Without crossing the line into conspiracy theories it’s increasingly looking like the failing retailer is desperately trying to put together a deal that will keep it alive and out of chapter 7 liquidation. There’s no other possible explanation for why it has not thrown in the towel – literal pun intended – and pulled the plug, allowing it live to see another day.

Whatever the deal, it will likely involve a chapter 11 bankruptcy filing and a massive reorganization of what’s left of the company under new ownership and management.

Here are several possible scenarios:

• It files a straight chapter 11 bankruptcy giving it some new working capital under debtor-in-possession financing. Its stock is wiped out and its lenders take over the company, putting in new management and trying to pick up the pieces to give it another shot. History suggests it won’t work but it will give BBB at least another 18 months and the new owners the same amount of time to extract management fees, special dividends and other financial shenanigans to recoup their investment…and then some.

• It arranges a sale of the entire company to a third party, probably still involving a bankruptcy filing, but with a prearranged plan to continue to operate. This could involve a severely pared down Bed Bath business and an emphasis on its BuyBuy Baby division which seems to be the most salvageable part of the overall company. Possible buyers could be equity players like Sycamore or others but it also could be a strategic buyer like Authentic Brands Group or even another retailer.

• Another potential sale could be to a long-shot buyer from the e-commerce side. BBB’s physical store network is the solution for an online seller like Wayfair looking to have stores quickly. Even Amazon can’t be ruled out, given their out-of-the-blue purchase of Whole Foods several years ago.

• Yet one more buying scenario would be for a purchaser to take the Baby division and the rest of the company gets liquidated. It’s a similar list of suspects who could pull this off but it would provide some payouts to lenders, suppliers and even shareholders should there be a sale and shutdown.

• BBB somehow gets a white knight investor to come in and fund its ongoing operation without any bankruptcy filing. Rogue investors like Carl Icahn have been known to do such things and frankly at the overall value of the retailer, it’s pocket change for these guys.

• None of the above and after frantic attempts to find somebody, somewhere and somehow to save it, nothing works and BBB simply goes away. It’s what happened to Toys’R’Us years ago and like that retailer, the intellectual properties of BBB will endure, with some investor buying them up and floating out the brand again in some distorted form.

Then again, by the time you read this, Bed Bath & Beyond has already taken action and all of the above – save for one scenario – is moot.

We’ve seen this all before. Don’t forget tomorrow is Groundhog Day.