Bed Bath & Beyond credit line default prompts another warning of bankruptcy

Jan. 27 (UPI) -- Bed Bath & Beyond has defaulted on its credit line and does not have the money to pay its debts, according to consolidated financial statements filed with the U.S. Securities and Exchange Commission.

"At this time, the company does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code," the SEC filing said.

The SEC filing said the default was triggered on or around Jan. 13 as a result of the company's failure to make required payments. It owes more than $500 million to JP Morgan Chase and $375 million to Sixth Street.

The company said it was notified by JP Morgan Chase Bank Wednesday that its payments are "due and payable immediately." Additional default interest rate charges of 2% a year started Wednesday.

Bed Bath & Beyond said Jan. 5 that it may be forced into bankruptcy and that the company had concluded there is "substantial doubt" about the ability to continue as a going concern.

"The Company is undertaking a number of actions in order to improve its financial position and stabilize its results of operations including but not limited to, cost cutting, lowering capital expenditures, and reducing its store footprint including related distribution centers," it said in the SEC filing.

Bed Bath & Beyond said given the current economic environment, and ongoing challenges to the business it "may be unable to service our debt obligations."

Gustavo Arnal, the struggling company's chief financial officer, plunged to his death in New York City on Sept. 4, just days after the company announced it would close 150 stores.