A sign hangs outside a permanently closed Bed Bath & Beyond retail store on May 1, 2023 in Hawthorne, California.
Patrick T. Fallon AFP | Getty Images
Billionaire activist investor Ryan Cohen won the dismissal of a shareholder lawsuit on Tuesday that accused him of cashing out too quickly as home furnishings retailer Bed Bath & Beyond teetered on the brink of bankruptcy The home furnishings retailer’s stock profited from the move.
U.S. District Judge Dale Ho in Manhattan said two former shareholders of Bed Bath & Beyond cannot force Cohen to return profits from the sale of his 11% stake because their claims were triggered by the retailer’s subsequent bankruptcy.
Shareholders are suing Cohen under a federal law that requires company insiders, including major shareholders, to forfeit “short-term” profits from buying and selling company stock within six months and return the money to the company.
Cohen launches online pet supplies retailer Chewy Current CEO of video game retailer game station.
Dubbed the “King of Memes” by ordinary investors, he fueled the meme stock craze in early 2021, often in online forums. Forbes magazine estimates his wealth at $4.2 billion.
Shareholder attorney Lee Squitieri declined immediate comment, saying he was reviewing the decision. Cohen, through his attorney Dave Wormuth, declined to comment.
Cohen disclosed in March 2022 that he owned a 9.8% stake in Bed Bath & Beyond and had pushed for changes, including new directors and exploring the sale of the Buy Buy Baby brand.
He angered other shareholders sudden sale of his sharesIts proportion grew due to share buybacks, and after five months, profits were estimated at $60 million.
bed bath File for bankruptcy In April 2023, its common stock was canceled when the Chapter 11 plan took effect in September.
Ho said that when the lawsuit began in October 2022, plaintiff shareholders Todd Augenbaum and Judith Cohen had standing to sue, but that is no longer the case.
He rejected the argument that they still had a financial stake because they purchased Bed Bath & Beyond’s stock, creditors could collect incentive payments or attorney fees, and should be repaid for the canceled stock.
The case is In re Bed Bath & Beyond Inc Section 16(b) Litigation, U.S. District Court, Southern District of New York, No. 22-09327.
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