Meeting with Goldberg the Plan Administrator

Michael: Do you need me to sign anything?

Goldberg: No, we don't need you to sign anything. Listen, we understand first of all, you're not the normal one of these guys. You're a doctor and that comes with some veracity right there. So let me just explain to you. Mike, I am the plan administrator. I have been doing, serving as a fiduciary in cases, not quite like this, but in big cases where I manage litigation, I've been doing that. My first assignment was in 1994. So doing it for 30 years, I have sued all sorts of companies: banks, accounting firms, law firms, board of directors. If there's a valid lawsuit to be brought that can benefit the bankruptcy estate, and I talk in terms of the estate, because money comes in and then water falls down in a priority scheme that I didn't create, I inherited. But I don't shy away from litigation. If somebody did something wrong, I will sue them, provided I have a valid cause of action and the ability to recover funds. I don't like to waste money, but I am considered pretty aggressive. I got appointed. They called me in August. I became official on the last day of September. And I immediately went out and started interviewing counsel to handle various causes of action. And what I mean, “handle that,” investigate, because we don't just, boom, hit the ground and file a complaint. We review, Gordon reviews. So Gordon is, I interviewed for counsel in connection with the stuff that Gordon's handling. And after multiple interviews where we brought some of the oversight committee involved and And the banks and everybody, we selected Gordon not only because he appears to be a really nice person, but he's a very skilled lawyer with a very good track record. So sometime in around November, we said to Gordon, it may have been December, we said, you're hired. We want to do this. 

And in that time, Gordon has reviewed everything. I'm guessing hundreds of thousands of documents, bank records. We've had numerous meetings, updates. And Gordon is handling what I'll call all of the companies' claims against professionals, officers and directors, financial institutions, things like that. I also, because it's highly specialized, went out and hired securities counsel. who specializes in different areas of the, you know, Securities Act. And they are, they too are investigating the same way, have reviewed, issued tons of subpoenas to what we call 2004 exam document requests and have reviewed a lot of documents. The bulk of what you are, you know, sort of raising in your email happens to do with stuff within Gordon's provence. It's not section, specific section 16B or anything like that, which is on the other side. So I did not invite the other lawyers into the call because I think Gordon is responsible for the stuff you're raising. So you sent us the email, I sent it to Gordon and we said, you know what, maybe it makes sense. If you have evidence, if you have thoughts, we want to hear them because neither Gordon or I are individuals that say it's either our way or it's no way. We want to understand if we're missing something. We don't think we are, but we want to understand it. We want to give you the opportunity to maybe explain things and hopefully maybe something productive will come out of this that will help us in our potential future lawsuits, I guess we're going to be bringing in the near future, but maybe there's something you have. You wrote a pretty intelligent email and we figured it's not like the normal email that comes in from the shareholders that “I'm an ape and I'm owed this money and I'm owed $10 billion type thing.” So we took it a little bit more serious and we wanted to just discuss it with you. 

Michael: I understand that there is a difference between what can be litigated and what is more speculative, but even the fraud where there is hard evidence, there is a lot. Starting with the most blatant fraud, the evidence of which was written right into the 10K and not even covered up, was the company buying back $47 million of shares at $237 per share when the average share price was $23. Not only that, but if you read the repurchase agreement with JP Morgan, you can see that they never intended to actually buy back the shares but rather lend them back through some affiliate through swaps. That is the center of the fraud, because that $47 million was just a small fraction of the $12 Billion total share buy backs JP Morgan did, and a fraction of how much was made by other people like Blue Owl, Blue Yonder…

Gordon: I might as well just address it as we go because I think it's easier like that. You know, the $237, I've done a ton of looking at this and I've looked at documents that are public, like the 10-Ks and 10-Qs, as well as the company's private records. and right now we're in the process and hopefully this week we'll get it. But, you know, we expect to get the full share ledger from the transfer agent as far as specifically what went to JP Morgan and what came from JP Morgan vis-a-vis the shares. Because I think the way that they're written up in the 10Q and 10k is highly misleading. And the reason why I think that is that some of the information contained therein, like they might reference a number of shares where there was an initial payment. So, for example, there was the first accelerated share repurchase. which was the first one, $225 million, and initially that was for 4.5 million shares and that's 50 bucks a share. But then subsequently, it's my understanding additional shares were delivered. And so the public disclosure, which really is 4.5 million on one hand for $225 million in cash, it's misleading because ultimately there was more consideration paid vis-a-vis the shares that were received in return for the cash. And so same thing goes with respect to the second day, because I, you know, I sort of have looked through and have worked through each of the disclosures, starting with each of the 10 Q's and then going through the 10 K's and looking at the number of shares that they say were purchased, the average purchase price and the approximate cost. And it all generally adds up. But in some quarters, like for instance, first quarter FY21, which was March 28, 21 through April 24, 21, you know, you could figure out a share price of $47 a share. But I don't think that was the actual share number. So for example, in your email, you mentioned the $237 a share, which was the April 15, 2021, 200,000 shares. I have a view that I believe that those shares were part of the second ASR. And even though they were transferred in the way that the 10Ks present the information, I don't think that the company paid, you know, call it, 47.6 million for those 200,300 shares. I think it was covered by the initial payment. Remember, you had the ASR one, which went through fine. The second ASR, they had some, I wouldn't call it instability, more volatility in the market where the price shot up during the period that the ASR was being priced. And so they ended up extending the ASR out into the future. So I don't draw as much negativity from at least what I saw in the 10K, because I don't think the 10K is very accurate. Now, whether there's a cause of action under the securities laws for the way that they disclose these share repurchases, that's a separate question for another day and perhaps another lawyer. But as I said before, Michael Goldberg got on, one of the things that we're spending particular attention about and thinking about and looking at are all these share repurchases. And it doesn't go back beyond 2020, because remember, Before 2020, they had repurchased about 10 billion of shares, maybe a little bit more, maybe a little bit less. But really starting in 2020 is when they announced what would ultimately become a billion dollars that they spent on share repurchases. So we're going. Yeah, go ahead, Michael. 

Michael: It’s not a matter of just reporting of share repurchases, but why there were repurchases at all. Why if they canceled the dividend because they couldn’t afford it, would they still we able to do $1 billion of share repurchases. The rest of the fraud makes sense when you see how everything lines up with their intention being to never actually repurchase the shares. IN the repurchase agreement it was pretty clear that the shares would be lent back rather than bought back, which in that case wouldn’t have to be paid back if the shares were canceled, which coincidentally they were. There was billions of dollars of motive for several people or entities to extract the value of the company and then unsure the company went bankrupt. For example, the property sale-lease-back with Oak Street, where they sold $1 Billion of assets off the balance sheet for $250 million, which they ended up spending in 5.5 months worth of rent. Unless they were absolutely in need of liquidity there was no reason to sell those properties or lease them back at an extremely inflated rate. So then to spend that money on share buybacks, just doesn’t make fiduciary sense. Then when you look at all the connections between all the people that each extracted value from Bed Bath and ensured its bankruptcy like JP Morgan, Blue Owl, Oakstreet, Blue Yonder, BCG, KKR, and the Clearing Houses, the fraud seems quite clear. KKR and Bain Capital got in trouble for the sale-lease back with Toys-r-us, and other behavior that bankrupted the company, but there was only a small settlement and it only went to the employees, the shareholders got nothing. We are still in chapter 11, so I don’t want that to happen again. 

Gordon: Yeah. Yeah, I mean, that's not lost on us. Although the share repurchase program that really started in earnest in October 2020, whereas the sale leaseback, closed on January 6 2020. So, you know, not that timing is all unequal, but the point remains that we're sensitive to the question about the sale lease-back. 

Michael: The lease-back was just one step in the whole fraudulent plan. There were billions of dollars involved. There were hundreds of millions of failures to deliver per day months before bankruptcy was announce, even while a bond restructure deal was on the table that would have saved the company and there must have been fraud for it to be rejected and then head right into bankruptcy. On top of those failures to deliver Bed Bath was listed on the Austrian Exchange in December 2022 where they use contract-for-difference rather than real settled shares, and billions of dollars of shares were sold there alone which were never settled and never paid for. Who even signed for it to be listed in Austria? Coincidentally who are connected to Credit Suisse with Credit Default Swaps on Bed Bath, who is connected to the shipping companies who price-gouged bed bath shipping, all of which was coordinated through the Boston Consulting group company Blue Yonder. 

Gordon: Yeah, I saw that in your email as well about that issue. And so, you know, that's another interesting point, which is something different, something we're not, um, that I can't really go into additional detail today on. But, you know, the overall position, one, you know, we're going to find out when we look at the share ledger, because we think we know the answer as to the exact number of shares that were tendered by JP Morgan in return for the ASRs, both ASR1 and ASR2. 

And so, that's a key question as far as, you know, I saw your comment about Boston Consulting Group and their relationship. I mean, as far as I can tell, there was only one director, Harsha, who had a relationship with Boston Consulting Group. So, you know, that that's something which we're certainly sensitive to. 

Michael: Even just one person on the board, with a high previous position in BCG, would be enough, because you know they take their BCG alumni status seriously. Even if it was just one member of the board who was  from Boston Consulting Group, is it just a coincidence then that after arriving to the board, they suddenly they hire Blue Yonder who is a Boston Consulting Group company? 

Gordon: No, but yeah, but right. So somebody who was who formerly was a consultant with the Boston Consulting Group, you know, that's. 

Michael: Somehow Blue Yonder who is an E-commerce solution during covid when people were using their stimulus money to renovate their houses, and in a time when Wayfair which is a Boston Consulting company made tons of money, why did Bed Bath lose money? Kind of convenient that Amazon and Wayfair, two BCG companies stole market share from their competitor Bed Bath…It’s not hard to see the connection, but if investigated, I know you would find more than just Harsha worked with BCG. For example, Mark Tritton and Gustavo Arnal, they both worked in big companies managing the Europe, Middle East, and Africa areas at the same time, Tritton with Nike who had BCG on board and Arnal who worked from a wholesaler store which carried Nike but also worked closely with DHL which is a BCG company. They both continued to interact with BCG in various ways, just look at their resumes. Whether they were specifically on the payroll of BCG or not, there is a very close relationship and you can see that all their motives align. 

Gordon: Yeah. But I mean, part of this is, you know, you think you have a theory. And the way that I like looking at these things is we're going to do an investigation. We want to learn what the story was. We're going to look at the board materials. 

We're going to look at what information was put before the board, when, and what was the basis for their decisions. Because part of what Michael Goldberg said when he started the call, you know, we look at not just what the claims are, but what we can collect. And, you know, you always need to be relative in thinking about, let's assume there isn't a grand conspiracy and you're looking at individual component parts and you're thinking about the question about, well, what was the business decision? Was there a rational basis for the business decision? Are there protections afforded to officers and directors based on the professionals who are assisting them with respect to the business decisions that they were making? So And then, of course, the question is, do you have colorable claims? 

And we're limited in certain respects to only a reach back of so far because every claim has different statute of limitations. And so if you think about what a New York breach of fiduciary duty claim would be under the New York CPLR, which is the basic civil procedure in New York State or New York State causes of action and substantive rights, you only have a certain look back to a limited period. And so just from my perspective, you know, looking at the sale-lease back, that might be too far back to tread. Which is, you know, it's helpful big picture overall. But if you're going to bring a claim that's going to lose because it's outside the statute of limitations, then that's not worth claim bringing unless there's a bigger picture about how that claim fits in. 

Now, as far as the board here I  personally I mean you know, the activism here was well documented and one could draw their own conclusions uh from the manner in which decisions were made based on what was happening in the activist market at the time. In particular, as you moved forward from 2020 into 2021, then 2022, Ryan Cohen gets involved in all those issues going forward. So, you know, it serves as sort of a base, but, you know, just to, and I'm just looking at your email, so if you pardon me for looking down, but looking at the second, your second statement, which is really about the use of the asset-based loan in order to pay back the shares, you know, it's interesting because that's something which is on my radar, but it's also something which, you know, on one hand, you can either look at this, did you have money coming in to make the share repurchases? And is there an A to correlate to a B in order to do it? Or is it better or healthier to look at the big picture? There may have been money coming in or available from one source versus what's the uses are going to be from that, you know, not necessarily from one source, but from the broader enterprise. Because I think the better way to look at that bath is to say, “Listen, they started out on a transition to transition from one business model to another. They brought in Triton to do that. And ultimately, the business changed on them and shifted.” And everybody knows about the difficulty they had with inventory, the difficulty they had getting their product to the shelves, the difficulties they had getting people into the stores. And this is whether it's COVID, you could blame COVID, maybe not blame COVID. But at the end of the day, it's that basic fact pattern of what they knew that drives the question rather than to say, well, they signed up for an ABL loan and then use the proceeds to pay something else. The question is, I think about it really is not just did they sign up for the ABL loan, but what was the business condition at the time they decided to do the share repurchases?”

Michael: There business condition was that they had been losing money every since Mark Tritton arrived in 2019, they were net negative every quarter, and at no point did they have any extra money to spend on share buy backs. 

 

Gordon: Right. I'm with you. So, you know, I guess the question then be, I mean, listen, you know, there's a difference in every investigation between what you know and what you can prove versus what you suspect, right? 

Michael: I realize that it would take some investigation to prove, investigation that would probably be better for the SEC or Department of Justice, but you can follow the money and even just look at the stated plan of each person involved. Just read Boston Consulting’s 2030 plan and their involvement in the World Economic Forum, their involvement in ESG and how the money gets routed through the Cayman Islands and then through companies like Coreweave and Natsource, that money they as crypto and FTX(who has direct links to market marker through Brett Harrison at Citadel and Virtu and Solana) gets put into the government and regulators pockets(who turn a blind eye to tokenized shares that are not actually being backed 1:1 used as locates for short positions). Then is it is coincidence that KKR who also is instrumental in the World Economic Forum is the ones to get the sweet-heart deal with the Lease-back through Blue Owl where they make back their initial investment in 5.5 months, and then not only have $1 billion of properties for free, but have over-paying renters? The World Economic Forum sets up the ESG standards for ocean shipping, and what do you know, Bed Bath is price gouged 10x? 

Gordon: So the overall thesis of your point on KKR, ESG, World Economic Forum, Blue Owl is what? That they all conspired to, you know, to pick winners and losers as far as companies go? Or is it something else? 

Michael: Look, I am not telling you to unravel the whole global financial cartel, although this could, the evidence is all there. One big thing that you can do, is look at what was done to prevent Bed Bath and Beyond from restructuring, the bond deal, but also the Activist investor plan by Ryan Cohen. The board, led by Mark Tritton, did everything they could to stop Ryan Cohen from unlocking the value of Buy Buy Baby and saving the company. That is why there were $40 million of share buy backs in March 2022 when they could not afford it, because it was a maneuver to push Ryan Cohen who was a 9.8% shareholder over 10% so that he wouldn’t be able to buy the company. 

Gordon: Oh, you mean because they did $40 million in the first quarter of 2022 of the share repurchases? And you think that contracted it enough to push Ryan Cohen high enough up? 

Goldberg: Yeah. Gordon, you're not handling this. This is the other lawyer, but Mike's fairly spot on, on that. Yeah. When they did the buyback, it contracted it up. And just so you know, Mike, I think you all know, I've seen it on Reddit, that we've moved Intervene into the Ryan Cohen suit. We're waiting. It's briefed. And if we're denied that, we'll just bring our own lawsuit. But that's something we're aware of and we're pursuing. Now, also so you know, there's not a hell of a lot of money involved there. Well, I'm not in any way... Seeking to sue Ryan Cohen saying, hey, you were nefarious or anything like that. I'm seeking on a technical thing that he became an insider because he exceeded 10 percent and he was trading at that time, pulling profit out so that we're allowed to recover that money. 

Michael: I am just not sure why you are wasting time or the estate’s money going after Ryan Cohen at all. He was trying to help the company, it was Mark Tritton that sabotaged Ryan’s plans and made him sell. 

Goldberg: It's not I'm not accusing him of doing anything nefarious or anything like that. 

Michael: You shouldn’t be going after Ryan Cohen at all. You should be going after Mark Tritton.

Goldberg: No, that’s not how section 16 works–you get it from the person who actually did the trade. So listen, Ryan Cohen's a big boy. He's represented by big law firms and he'll either, you know, we'll either prove the case and, or somebody will prove the case, and he'll pay a little money or he'll win. But he should have been very, you know, he should have been a little more careful maybe in trading, knowing that they were doing buybacks and stuff when it contracted them up. 

Michael: If you are looking for pump-and-dumps why not investigate Jake Friedman? He bought the exact bottom and sold the exact top, and pumped it on reddit. His plan then was to buy swaps on the way down.

Goldberg: Yeah, we looked at that. Just to be honest with you, Jake Friedman never became an insider in our mind. Sometimes you get lucky. 

Michael: Lucky? He wrote a paper with Credit Suisse on his plans to do it. Just look into where he got the $25 million to start with.

Goldberg: I have very, like my securities litigators are like Gordon, they're top of the game. And, you know, we're looking at all this. I mean, can I tell you we're done with our investigations? No. But we're looking at it. And at least preliminarily, you know, Freeman may not have an issue. Yeah, but that's not part of the cause of action where his money came from. The action is, A, are you an insider? And B... Were you, at the time when you were an insider, were you, you know, selling and making short swing profits within that month, you know, six months, and the issue becomes, A, he was never an insider. So... 

Michael: Jake Freeman has a family office in Wyoming, we don’t even know how much he actually made. Him pumping the stock and then dumping it wasn’t even part of his main plan. The plan was to short the bonds, and the leverage on that, which could have been orders of magnitude larger, especially since he was working with Credit Suisse and University of Southern California. It all plays into the bigger picture, and any one you investigate, you will find how it connects to the rest. You are already investigating MSC, what gave them the confidence to do something so illegal as not filling contracted orders and to price gouge 10x?

Goldberg: No, I think you're getting into, like, these conspiracy Rico-type stuff that... You're putting together, okay, MSC was doing this at the same time it was working with him. 

First, we have no evidence of that. But secondly, that's not the cause of action under securities fraud of where your money came from. 

Michael: Freeman said he was going to short the bonds, and then Lazard offered to rewrite the bonds which would have saved the company and they got shot down? Why would the bondholders vote against it if that would mean the debt default would make their bonds worthless? There is no way any of the bondholders would have voted against it, unless they stood to gain more from the bonds defaulting than the whole point of holding bonds to begin with. There is a connection there, there has to be. No one votes to lose all their money on purpose. We know the credit default swaps are out there for Bed Bath and Beyond, billions and billions of them. 

Goldberg: Yeah, but I still don't. So there's connections there. You can make billions of dollars on this and not do anything wrong. Just because somebody made billions of dollars or even hundreds of millions or 100 million like Jake Freeman doesn't mean they did something wrong. Not everybody who made money did something wrong here. We have to look at people who did something wrong. Now, we're looking at everything, and I'm not giving any of these people a pass. 

Michael: What if you look and find that Freeman got the money from JP Morgan who did all the share buy backs, and knew the exact timeline of when they would happen? JP Morgan through the ABL loan could do cash sweeps on Bed Bath’s account any time they wanted, which prevented them from filling their shelves two years in a row during the holiday season. Don’t you see a conflict of interest when someone like Jake Freeman is betting against the Bed Bath bonds, and JP Morgan is doing punitive cash sweeps and abusing their first lien position to prevent the company saving itself from bankruptcy? Not to mention they drained Bed Bath’s large cash position they had in 2019 when Tritton joined the board through the most ridiculous and aggressive share buy backs in history?

Goldberg: I just want to say that just because somebody pulled out money and banks at JPMorgan Chase or does something, has an account there, doesn't mean that there's anything wrong with that or there's a conspiracy. 

Gordon: No, but to that point. I was just going to add to that point. I mean, we're looking specifically at the advice that JPMorgan gave the company. JPMorgan was its financial advisor, and you know, in many respects, they feel they wore multiple hats, right? They're a financial advisor, but they're a counterparty on the ASR. And so they play these different roles, but, you know, they're certainly not getting a pass in anything we're doing. And, you know, part of what, you know, we've sued basically, just by way of additional introduction about who I am, I mean, we've sued everybody and their mother. We represent institutional investors in securities fraud and all sorts of other fraud-based, you know, engagements. So, Whether they're a big four accounting firm, whether they're a bulge bracket bank, whether they're a private equity firm, we've sued them all. And so if there's a colorable cause of action against JP Morgan that we think we can make out, you'll read about it when it gets filed. It's one of those things where we're not going to shy away from it if we think there's something there.

Goldberg: And to that, it's not a secret. To that extent, both Gordon and I will make more money by bringing valid lawsuits and bringing in a lot of money for the benefit of the creditors of this estate. I mean, we want to find valid claims against people and sue them. We are that's I mean, that's our goal. Our goal is to those claims and bring those claims. But we're only going to bring valid claims because A) you can get sanctioned if you don't bring a valid claim, and B) we're not that type of people to file lawsuits when we don't have a valid claim. There's one important thing I really do want to stress, and I'm not in any way, I am sympathetic to the shareholders. Mike, you need to understand that. But the shareholders, there's two issues. The first issue is a gating issue of whether the shareholders are even allowed to receive anything, even if we hit grand slam after grand slam after grand slam. I would imagine under the way that the plan was confirmed, which again, neither Gordon nor I played a part or a role in it. We both came in here post fact. It says specifically that the shareholders stock is canceled and they shall receive nothing. Okay. So, so that's a court order that was entered, you know, Before Gordon or I were ever involved in the case, we didn't draft it. We weren't part of it or anything like that. But the second thing is the shareholders are behind billions. I shouldn't say billions, but at least a billion and a half dollars of other debt. And I think Gordon and I, if you ask us, hey, do you guys have a shot at bringing a billion and a half dollars into this? into this case. I think we both say at this point, highly, highly, highly unlikely. 

Michael: There really is only about $200 million of the 2024 bonds that have to be paid out, which, even those could just be rewritten, the rest, mostly the 2034 and 2044 bonds could be covered in a debt-to-equity swap. Someone could do that, like Ryan Cohen, and then have a public shell of a company with billions of dollars worth of tax credits through the net operating losses to start with. Even just one of the four lawsuits against the shipping companies like MSC, which would bring in more than $400 million, would easily cover everything, because the rest is the FILO loan from Sixth Street and they would be the ones doing the credit bid, which is what they said in court.

Goldberg: No one's... This company's dead! 

Gordon: This company's done!

Goldberg: Nobody's doing any... This company's done. There are no plans. There are no Ryan Cohens coming in. There are no debt-to-equity conversions. 

Michael: What about the $1 billion equity offering transaction completed by Lazard september 29th where it said the FILO was upside $100 million?

Goldberg: I... I got to be honest, I don't even know what you're talking about. I'm not in any way doubting you. When Gordon and I inherited this company, it is dead! There is no plan! There is no debt equity conversion! I have never spoken to Lazard. I have no idea what you're even talking about. I'm not doubting you again. It's just that when we inherited it…

Gordon: It doesn't matter because the only thing that matters in Michael's world and my world is what the bankruptcy plan says. And the bankruptcy plan says two things. It says, one, the shares are canceled, which means the shares are canceled and everybody in the class, as the classes have been defined in the bankruptcy plan, get zero. The shareholders didn't even get the right to vote. 

And if they had had the right to vote, that would have suggested they might have received something. But they didn't have a right to vote because they're presumed to get nothing under the bankruptcy plan. So whatever is there, and this gets to Michael's point, whatever is there is there for the benefit of the trust…There's no trust here, but if the beneficiary is in the flow through the planets where money moves. The other point, which is just a broader point, which is to say, you know, we're always looking for deep pockets, but there are limitations on deep pockets. Unless you can really tag one of the bulge bracket banks here like JP Morgan or somebody else where their culpability is really, really big. To get past the billion and a billion and a half dollar to put the shareholders into the money is going to be extraordinarily difficult. I can't comment as to the specifics as to how much money is there for director and officer liability insurance, but I don't want to go any further because I don't want to give you material non-public information on that point. 

Michael: So why was the BBBY ticker preserved for the estate? Which there is probably at least 500% short interest on it. That alone is a huge asset.

Gordon: I have no idea why the ticker is preserved. The ticker is an asset if it's being preserved for the benefit of the estate, but this bankruptcy plan says the shares get canceled. That's the only thing that really matters. 

Goldberg: I'm actually looking right now at a statement from the plan, Mike. It says, holders of interest in class nine and class 10, which are the deemed rejected class, are impaired under the plan and are entitled to no recovery under the plan and therefore have been deemed to reject the plan. So I don't see a way. First of all, I got to get by the hurdle of collecting a billion and a half dollars because I have bank debt of several hundred million. And then I have about a billion two. I actually have a lot more until I get rid of that $10 billion admin claim, which I'll get rid of. I'm fairly confident. and some other claims, but I have a billion two of legitimate trade debt that come. And then I have possibly some bond debt, but trade debt that come before the shareholders get a dime. 

And, that under no circumstance can that ever get adjusted. So now if let's say we hit, let's say Gordon hits a grand slam and my other lawyers hit a grand slam and we, let's say I picked up, $3 billion, so I have this excess money. At that point in time, it's like, wow, Judge, we canceled these shareholders, and technically maybe they're next in the waterfall, so we should revisit it. I don't know if he says that's too late. I mean, I'm not even going to get there because I probably will never be in that factual situation to be able to go to him and say that because we never, ever, ever even – It would be the most unlikely of unlikely scenarios that we ever get enough money that that even becomes relevant. And I don't ever see a shot at us ever getting that billion and a half dollars in recoveries to do that. So I think the shareholders are... And don't take this the wrong way. I get it. But I think you're living in a little bit of this hypothetical fantasy land that you're ever going to get any money here and you think... And I've read everything on Reddit, and I've gotten a ton of emails that the shareholders say, okay, Ryan Cohen's coming in, and then this guy Pulte's coming in, and we're all going to go put it in this. And we have some secret plans. There are no secret plans here. There are no conspiracies. It's very simple. We have a waterfall that we inherited that has about 350 million of bank debt is owed, followed by a billion two of trade debt. And that's the denominator. And now we have to go get the money to make up the numerator. And we don't ever see a way that that numerator exceeds that denominator. And therefore, I don't really. And maybe you could explain it. And I'm not. Please understand, this is a very constructive conversation and you are a really intelligent guy. But I'm just trying to figure out because I spend a good part of my day responding to shareholders because I feel bad. You know, I feel bad if somebody put their hard-earned money, you're in medical school or residency now, and other people are not as fortunate as you, you'll at least make a good living in your life. But some people actually went out and spent their entire net worth thinking they were going to, you know, do this. 

And I feel horrible for them. But what are people actually thinking here? What are the shareholders actually thinking? Because I have in no uncertain terms stated to the people like, I don't get it. You've got to face reality. 

Michael: Bed Bath and Beyond was a $5 Billion revenue company right before bankruptcy, even in the winddown sales, without even buying more inventory it was able do the equivalent of $3 Billion of revenue. Buy Buy Baby alone was said to be a $1.5 billion company right after it was sold for what, $15.5 million? Where did all that value go? There was a massive crime here, and there is a lot to claw back. Even just the properties that were fraudulently taken by Blue Owl, the DOJ has the power to, and should undo that fraudulent transaction and give the properties back to the estate.

Goldberg: But wait, let me respond to that, Mike. So we have no leases anymore. We have no inventory. We no longer have the name. We have no employees anymore. We have no funding. We're broke, basically. I have a few million dollars in the bank that comes in, it goes to the bank. Every time I get some money, it goes to the bank. We have no offices and directors. We have no business plan. We have nothing. There's no business. So what are we going to relist and do? 

And why in the world would anyone ever take on this, if they wanted to do that? Let's say you had somebody, Ryan Cohn came up with this great idea. Why is he going to come in and use our company when there's a billion and a half dollars of debt saddling this estate? What is he going to do? He's going to go create his own company. 

Michael: When Ryan Cohen invested in Gamestop, because of the short interest, they were able to raise over a Billion dollars in an at-the-money offering without even diluting the shareholders very much. That short interest was stolen by brokers who turned off the buy button and then hid the billions of counterfeit shares, and so this time with BBBY it’s different, they could do a secondary offering, and raise billions of dollars. Shares were borrowed by brokers, and they have a contract to pay them back. They borrow way more shares than exist, and they got themselves in a problem, and they are trying to bury the problem instead of pay it back. Those borrow shares are guaranteed buyers of the secondary offering, which would with in days have the potential to raise billions of dollars. 

Goldberg: But we stopped trading. We're no longer trading. We have no stock. GameStop is still in business, right? I can walk into a GameStop store today, right? 

Michael: The ticker with the short interest on it is preserved, it is still in chapter 11 restructuring, and there is an 1145 provision written into the plan that it can be automatically relisted.

Gordon: No, but this isn't trading anymore because there's a bankruptcy plan that's gone effective that says it isn't trading. And that bankruptcy... 

Michael: They should have never been in bankruptcy in the first place. That’s the whole point, there was massive fraud. Sue Gove in her etoro interview in April 2023 their turnaround plan which was to reduce their footprint to only their most profitable stores. She said that they had 2 weeks to finish selling shares and we all voted on the reverse split that would have allowed them to raise more money. Then ten days later they entered into chapter 11 early? And the $5 Billion company is sold for 30 million? Meanwhile neither Sue Gove nor the board do anything about all the fails to deliver and Bed Bath staying on Regsho the months leading up to bankruptcy and the whole time it was in chapter 11. If this was all rushed by the board, and by the judge, then there was RICO level fraud, and the whole thing should have been reversed. 

Gordon: Yeah, I mean, you raised that in your emails being one of those points, and that's something that we're going to take a look at as part of our overall analysis and review. But that doesn't... 

Michael: Why is there a but? We can see the value of just one subsidiary of Bed Bath and Beyond, Buy Buy Baby, with just a dozen stores and the website it is a $1.5 Billion company. If the shares get listed again, they could put more stores, they said they want to have 120 Buy Buy Baby stores soon. Bed Bath was intentionally being run into the ground and even then it was still a $5 billion dollar company. The people who colluded to bankrupt the company should have to pay, and we know all the names. 

Gordon: Well, you're saying it's a $5 billion company. How? You're saying the market equity value plus the debt? 

Michael: It's just at least a $5 Billion company, and easily could be soon. It was doing $5 Billion revenue without the shelves stocked with the name brand items classically that have been very profitable for it. It was a $5 Billion revenue company after getting rid of the famous 20% coupons.  It was a $5 Billion revenue company with $1.5 billion cash on hand when Mark Tritton arrived. What happened to all that value? That somehow comes out to $30 million and shareholders getting wiped out? There were more than 60 interested buyer in January 2023, there is no way no one wasn’t offering more than $30 million for the whole thing. 

Gordon: But Michael, think about it this way. And the bankruptcy process is the world's biggest open auction. If there was an interested buyer who was interested in acquiring the assets, they had every opportunity during the Chapter 11 case to do it. You're raising the first question is, well, why'd they have to file for bankruptcy anyway? But once they file for bankruptcy, assuming there is value destruction, because that's what bankruptcy often will impale, then they file for bankruptcy and there's still an opportunity for somebody to come in and say, hey, I want to buy the assets. But it's not the same risk reward profile now because the bankruptcy code is, in essence, said that the company is done. And through the bankruptcy plan, which is effectively a contract amongst all the creditor constituents, the shares have been canceled, and there is no sort of future tomorrow or what tomorrow could look like. 

Michael: I do not have the privilege to see behind the curtain. I listened to every court hearing that was publically available and have read the vast majority of the court filings. You guys are the trustees, and the ones with the ability to subpoena and find things out, and you have a fiduciary duty to do so. Likely even before 2019 when Mark Tritton arrived on the board, but definitely after he did, there has been as much fraud as humanly possible. It just seems really odd that the board after him with Sue Gove didn’t litigate him, and I haven’t seen anything other than tapping the D&O insurance as far as suing any of them. Nothing seems to have done right, from the share buy backs, the leases, liens, and blocking at every step, and so to just say, it is what it is and there is nothing we can do about it, doesn’t make sense. Things were not done right.

Goldberg: Mike, yeah. So we're not saying that things are done. 

Michael: Not even close.

Goldberg: Right. In fact, we agree with you that things were probably done wrong, and that's exactly what Gordon is looking into. All I'm saying is, as we sit here today, and today is permanent, this company is dead. It's over, and it will never come back to life. Period. It's dead. But we have to figure out why it went dead, and are there causes of action against individuals because it went dead? Did somebody do something wrong negligently, fraudulently? And does the law provide us the ability to go after those people, institutions, or whatever to get compensation for their actions that caused the company to become dead? But the company is dead. and will never come back to life. There is no plan. Ryan Cohen is, I've never spoken to Ryan Cohn in connection with this case. There is no plan to ever bring this company back. And people need to understand that. And that's the thing that boggles my mind because everybody thinks in this day and age of social media, there's conspiracies and stuff. There are no conspiracies here. This company's over, dead. It'll never trade again. 

Michael: Even without Ryan Cohen the waterfall would reach shareholders. There are four shipping cases, the MSC case is for $415 million alone, you add on the $1 billion of share buy backs that never should have happened, or the $1 Billion from Lazard, and already the math adds up. There is a lot of money that could be clawed back from a lot of people that were involved in this fraud. 

Goldberg: Well, we're now in charge of the litigation and we're looking at everything. 

Michael: Sixth Street, who holds the DIP loan, said in court that their intention was to do a credit bid. 

Gordon: I mean, listen, the bankruptcy plan says the dip claims are 240 million. This is the disclosure statement I'm talking about, so the numbers could be off a little bit. The FILO claims are 350 million, and then between 1.8 and 2.4 billion of GOCs (general and secure claims). 

Now, I don't know exactly how... 

Michael: What if someone like Ryan Came in here and plopped $2.5 Billion on the table and says “I want to pursue shareholders?” 

Goldberg: I would have to look into that. Buy why is Ryan Cohn going to piss away $2.5 billion into a company that's worth zero? I mean, that's like saying, what if I took the last $7 million I have in the bank and go buy lottery tickets and win five Powerballs in a row? What can I do? I guess that money would get distributed down the waterfall and go to the thing. But, I mean, is Ryan Cohen... telling anyone he plans to do this? Because we're... 

Michael: No

Goldberg: Yeah, so why is he going to... 

Michael: But he made a plan for the company, and I am assuming he wouldn’t give up. It doubt it was some random impulse buy, and I am sure he isn’t scared of hard work or a fight.

Goldberg: But at the time his plan was there, the company wasn't completely... It wasn't dead and out of business, right? This company has no... 

Michael: It’s a public company shell, with tax credits, subscribers, data, supplier deals, distribution centers, and enthusiastic shareholder base. 

Goldberg: But think about it, Mike. I'm telling you the truth. I have no inventory. I have no leases or stores. I sold the data center. I have no employees. There are no offices and directors of this company. This company doesn't exist. 

Michael: What about the short interest and the net operating losses? That alone would make it all worth it.

Goldberg: But shares are meaningless now. They don't exist. They're canceled. So shares out there is nothing. It's like ether. And as far as the NOLs, I'll share with you. I have a memo from big tax experts, two memos, that the NOLs cannot be converted right now. They're worthless. I have those memos. I've looked into that. But that's just a tax. In order to take advantage of internet wells, you need to have income and all that. And assuming I could, I could sell them maybe, but that's not getting you $2.5 billion to get to the shareholders. But we're mixing up two things here. The first concept is, do we have an operating business? No. Will the company ever operate again? No. And the second issue is, do I somehow possibly – cover the $2.5 billion in the waterfall. I can't tell you that's an absolute no, but I'm telling you that's a really, really highly unlikely. But one thing I can tell you is an absolute no. Bed, Bath & Beyond with this company, because we sold the name, so Overstock is using it, but this company is dead, will never, ever come back to business, ever, in any capacity. 

Michael: The equity doesn’t have to come back in the same capacity, it could be a holding company. 

Goldberg: So now you own shares in a company that doesn't exist. What do your shares have? But what is a holding company? You can go create a holding company today. 

For $99, I can go get you a holding company today. I can issue shares. With…

Michael: Not with Billions of dollars already in it.

Goldberg: Wait, wait, wait, wait. Continue on this. Billions of dollars worth of what? Because I don't see billions of anything. The company is valueless. 

Michael: From the short interest.

Goldberg: Short interest? That's nothing either. There's no longs and there's no shorts. 

Michael: That’s because there was a crime.

Goldberg: Yeah, but if I go and rob a bank and steal all their money and they go out of business, their stockholders are still broke. It doesn't resurrect it. 

Michael: If there is fraud, the plan can be undone.

Gordon: Well, let me just mention, hold on. I want to just raise a practical point because this practical point, I think, is going to end the conversation about what happens if there's a big RICO that blows up the whole thing. Under 1144 of the bankruptcy code, you have 180 days to petition the court. And that's permissive. You can petition the court. The court doesn't have to agree to it, but you have to go to the bankruptcy court within 180 days to say the plan's confirmation was procured by fraud. that's the only way you undo a plan you cannot you know there's equitable mootness. There are a lot of other doctrines as well, but that's the statutory doctrine. So there really isn't a realistic avenue. Even if we found gold and we could, you know, allegedly, you know, a giant conspiracy or something, there's no basis or under the bankruptcy code for somebody to come back after 180 days after the plan has been confirmed, which I think we've now gone past that day number. Um, for somebody to come back and say, hey, judge, pretty please, will you undo it? And even then, the judge doesn't have to undo it. The bankruptcy judge can say, no, there were people in my court who would wreak havoc on the bankruptcy code and the bankruptcy system for me to undo the plan now, so I declined to do so. So it's not as if there's avenues to really undertake this effort, even if there was sort of a fraud large enough that would make a judge say, “holy smokes, they just lied to me in front of me in my court.” 

Michael: Then it would just have to go to a higher court. If the system has holes in it, that is exactly why there are higher courts. Either way the law has to be updated so this sort of crime doesn’t just keep happening. Either way, I am going to see it through. These people who did the crime are still out there, some like Mark Tritton are on the boards of other companies. 

Gordon: Yeah, and so just simply on that point, because it's a smaller point, I think, but that's something which we're in the process of looking at as well to better understand what was the decision-making that was occurring, what happened, what they do with the money, and so on and so forth. 

Michael: And so what happens if the higher court agrees? What if they see the $12 billion of fraudulent share buy backs that JP Morgan very actually did but just pocketed the money and tried to sweep the whole company under the rug?

Gordon: It'll never reach you. I hate to be blunt about it. It's because I've been doing bankruptcy for 25 years now. And it's never going to reach you. 

Michael: It would be the judge that says that–it’s in their jurisdiction, and it will just keep going up the court system until it is before the supreme court and the whole country will be able to watch and hold them accountable. 

Gordon: Doesn't matter, though. I operate in a statutory world where there's a statute. The statute is what I operate under. The statute that's informed by equity. It's informed by court's opinions. But there's no mechanic in the bankruptcy code or in the bankruptcy plan, even if billions upon billions of dollars were found. When Michael was saying he'd have to try to figure out what to do, I was wondering if I could help him try to figure out what to do because it would be rather, I wouldn't say rather unusual. It would be totally unprecedented to have to recut the deal. And if I'm a general unsecured creditor, I would say, forget it. That upsides mine because I lent money for a long time. I wasn't compensated. I don't get interest on my unsecured debt. during the course of a bankruptcy pendency. And any upside that's captured in litigation is mine before it ever goes to the shareholders. Shareholders have different expectations. We're creditors. We get paid first. So there are a variety of different things that I think, you know, would go in that direction. Now, that doesn't mean we're not looking at all the claims. And if God forbid, actually, God not forbid, if we were unable to find two or three billion dollars worth of value, this is what I describe as a high class problem. 

Goldberg: And, you know, no one would be dancing bigger than Gordon and myself because we'd be retiring. 

Gordon: I might retire with that. That's correct. But that all being said, I mean, and it doesn't change our overall approach to the case because we're looking at this to say, where can we find good claims that we have, you know, sort of the merits to bring that are timely and that we can go collect from people? Because, you know, if I mean, listen, Gustav Arnal is no longer with us. We're still going to sue him if we have the opportunity, and have causes of action that are good to bring, but there may not be a lot of fruit at the end of that, you know, at the end of the branch. 

So, you know, these are all considerations that we pay attention to on a day-to-day business. 

Michael: What about the $1 Billion from lazard on the 29th? Where did that go?

Gordon: I'd like to see that.

Goldberg: The 29th or what? 

Michael: September 2023.

Goldberg: No. So I would have been involved in that because, you know, even though I officially went on the 1st of October, I started like around September 20th getting sort of up to speed. And I don't know where you're reading that, but somebody's put fake information out.

Michael: It says it on Lazard’s website.

Goldberg: No, I'm not saying – I'm not doubting you it's on there, but somebody hacked that website or it's fraudulent because $1 billion – You're saying they said they put it into Bed Bath & Beyond? 

Michael: Yes

Goldberg: Did not happen! I control all the bank accounts for Bed Bath & Beyond! Unless they're talking about the overstock Bed Bath & Beyond when we sold the name. 

Michael: No, it was not Overstock. Overstock would have to also have a FILO loan for that to make sense, because that what Lazard said, they did 1.025 Billion equity offering and unsized the FILO loan by $100 million.

Gordon: Listen, I'm on their website now. I see where it says Bed Bath & Beyond completes $1.025 billion equity offering. Semicolon, amends credit agreement and upsizes filo. 

Goldberg: Wait wait, that's overstock . com. That's not us. That's got to be. That's not us. I guarantee you, I swear on my life that we did not do anything on September 29th that I'm aware of because I'd be saying, well, here's my $1.2 billion. I don't have that in my accounts, Mike. I guarantee you they're talking about the overstock dot com, Bed Bath and Beyond. 

Gordon: Yeah, Mike Goldberg, I'm just going to send you a screenshot of what I was just reading from. 

Goldberg: Yeah, but…

(long silence)

Gordon: You're looking at this all wrong, whatever they're worth today is something different. There was an opportunity in bankruptcy for people to come in who wanted to buy the assets. 

If somebody had approached Kirkland, the board, or even the Pachulski-Stang people, who were the lawyers for the unsecured creditors in the case, and said, hey, I want to buy the crown jewel, Buy Buy Baby. I'm willing to pay X dollars. They would have run into court and jumped up and down and said, we've got this great offer, great deal on the table. We should be pursuing this. And they just, for what it is, they didn't. And so that's where I sort of... 

Michael: So who is the guarantor? 14% of the 2024 bondholders objected to the plan because they wanted the estate to monetize the NOLs, and that if there was nothing left of the company other than the net operating losses, that it didn’t make sense for them to speed through and just leave them behind. They said to find out who the guarantor was, that they would need to sign an NDA, and after they signed the NDA then they were fine going forward with the plan–a plan where they would get zero to two cents on the dollar back. 

Gordon: I don't know the answer to the question because I don't think I have a solid foundation in the facts to know the basis for what the guarantees you're talking about are. 

Goldberg: Yeah, I'm missing what you're talking about. What are you talking about? 

Michael: The estate didn’t take the time to monetize the NOLs, some of the bondholders objected to the plan because of that, Sixth Street said there was a guarantor an if they let go of their lien, that likely there would be more than enough, but if they didn’t let go of the lien, that there wouldn’t be. They wanted to know who the guarantor was, but had to sign an NDA to find out. Once they did, they were suddenly okay with the plan. 

Gordon: Because when businesses, Michael, when businesses sometimes go through the floor, things move quickly and bondholders may look at it and say, yeah, we're sitting behind 350 million of filo. We're sitting behind the dip. The value that we think the business is worth is not commensurate with us actually putting up a litigated fight. And people often don't that people act rationally, which is to say, I'm not going to chase, you know, good money with, or bad money with good, or I'm not going to put new good money in now to go litigate that fight and to go fight whatever there is in the bankruptcy case. I don't think that there's some secret deal on the guarantee that provides the bondholders with some increased recovery. I'm not aware of one. I'd be shocked if I, if that was the case. 

Michael: It doesn’t seem like a coincidence that the BBBY ticker was preserved and for a long time now BBBY has referred to Buy Buy Baby. That is what the lien was on. Bed bath and beyond was referred to, like you did in your email, as BBB.The BBBY bonds are even still trading.

Goldberg: I don't even know what, I mean, I understand what you mean, the BBB, whatever it was, a ticker-like symbol? 

Michael: Yes, the ones the bonds, which are still trading, are connected to. 

Goldberg: Right. No, Bye Bye Baby and Bed Bath & Beyond have not traded since September at all. They haven't traded. Their ticker doesn't exist now. I mean, there may be a symbol BBBY, but it's meaningless. There are zero trades taking place in this company now. 

Gordon: Gentlemen, Michael, I'm sorry. I have a call that I'm late for, so I do need to hop. But Michael, I appreciate your time. And don't take anything that we've said in our tone and talking from my perspective of the bankruptcy reality. I spent 20 years representing unsecured creditors and talking to people who candidly meet I wouldn't say have difficulty understanding, but the bankruptcy process is not always friendly and kind to everybody. And sometimes there are people who ordinarily you'd say, well, we should have a right, we should have some protection, who often are the ones who bear the brunt of it. But I always say, when the bankruptcy plan says something, that's the best source of information rather than hearsay or over-the-moon possibilities. 

Goldberg: I will tell you that I'm looking at this Lazard thing. I have no clue what it is. The only thing I can think of is that it has something to do with overstock and not Bed Bath & Beyond.

Michael: Can you look into it then?

 

Yeah, I'm going to find it and send you something. I'm going to look, but I don't really get it, to be honest with you. 

Michael: Can you also look into the Austria IPO? They were listed right as the bond restructuring was about to be rejected, and there were Billions of dollars that were traded and never settled. That money went somewhere.

Goldberg: Well, Gordon said he's looking into that. I got to be honest, I'm not even aware of an Austrian IPO. So Gordon says he's looking into that. I'm looking into, so it appears Overstock changed its symbol to BYON, I think. So let me see something. Let me click on this symbol and see if they have anything news with Lazard. 

Michael: Overstock used the BYON ticker because BBBY was preserved for the estate. Why was it not sold? It’s there a duty to sell everything? Do you even know where it is right now? Like, do you have access to it if you were going to sell it?

Goldberg: I swear to you, this is not us. And if somebody is saying it's us, I mean. 

Michael: Why don’t you just call Lazard?

Goldberg: Well, I'm going to go to the corporate lawyers now and say, what the hell is this? That's where I'm going to go. I mean, I think they're going to look at me like I'm a little crazy because they'll be like, do you really think you got 1.2? Where is it? It's not there. And they're not on my creditor list, Lazard. So I've never spoken to Lazard in the context of this case, ever. So I've never dealt with them. I never heard of this. This is the first thing I'm hearing about this, to be honest with you. 

Michael: It’s not crazy to assume Lazard is in this deal, they were brought on a year before bankruptcy to broker the deal. That is why is all seems so odd, is I am not sure why the Lazard deal didn’t go through in 2022 with the bond restructuring, or the equity offering in 2023.

Goldberg: I'm sure you know it better than I know it. I just know what I'm dealing with in the bankruptcy. But I can certainly ask. What is this about? Gordon sent me the thing. Bed Bath & Beyond completes 1.02 billion, 0.25 billion equity offerings, amends credit agreement, upsize files sold by 100. 

And this is dated September 29, 23. All I can tell you is that's not the Bed Bath & Beyond we're talking about, if that even happened. 

Michael: How can you be so confident if you didn’t even know they have been trying to broker a deal for over a year and half, and have already been paid almost in full for it. 

Goldberg: They may. They may. I don't know. I think maybe this is somebody – listen, a lot of the Reddit people may have hacked the website – I don't know why this would be on their website, but it's not my Bed Bath & Beyond that I'm running. 1.025 billion. 

Michael: It’s not just them, it’s Sixth Street. Why would they buy in, only to see it go into bankruptcy a year later, and then double down with the DIP, only to partially get made whole? Buy Buy Baby was the collateral, and they couldn’t have gotten it if they wiped out everyone else, the judge wouldn’t have allowed that. You should talk to them.

Goldberg: Let me – You know what? If this was the case, the happiest people in the world would be Sixth Street. They would have taken their money and gone. But let me reach out. Listen, I'm not telling you that it's not fraud and we're looking at everything, but I think what you need to focus on is, or not focus on is this company's never coming back. I'm going to get you information that shows that this did not happen. Or if it happened, it's not our bed, bath and beyond, because I would have to be aware of this. And, where would the money come to, Bed Bath & Beyond completes one point. We did not do any equity offerings then. I guarantee you this is wrong. 

Michael: How would they accidentally post this? They are a publicly traded company. They can’t just post things like this. 

Goldberg: It never happened, though. I'm telling you the truth. But let me find out what this is because if it's on Lazard's website and it's legitimate, I have a feeling it's something that the other – the new Bed Bath & Beyond did. But it's not – It's not the Bed Bath & Beyond that you all invested in. And there could be confusion between the two when they sold the name. I had to change the name of the company, and I did that in October. That's why DK, we're Butterfly WDD.

What does WDD and DK mean? Wind Down Entity, Wind Down Debtor. Give me a second. Well, hold on a second. Let me speak to the person who named it.