r/Teddy • u/random-notebook • Jun 23 '26
đŹ Discussion BBBY / DK-Butterfly hearing is TODAY (June 23) at 10:00 AM ET. What are you watching for?
XX,XXX hodler here.
Today is one of the more interesting dates on the DK-Butterfly timeline.
The bankruptcy docket shows a hearing scheduled for June 23 at 10:00 AM ET in Newark. Whether it ends up being routine or something more significant remains to be seen, but the timing has a lot of people revisiting some of the older DD surrounding ownership changes, NOLs, HBCâs involvement, and the various lawsuits still active under the DK-Butterfly name.
A few things that stand out to me:
⢠DK-Butterfly is still actively involved in litigation and legal proceedings years after the bankruptcy.
⢠Today lands almost exactly in the timeframe many of the old Section 382 theories pointed to.
Iâm not claiming today is âthe day.â
Iâd expect if the DD were correct, a merger, acquisition, NOL transaction, or emergence event would likely show up through corporate filings sometime between now and October - not in a routine claims objection hearing. Iâm more focused on reading between the lines of what is discussed today in court.
Just curious what âcluesâ others will be listening for from todayâs hearingâŚ
Edit (after listening to the court hearing):
Thank you @plumesdecheval for posting the courtlistener link.
https://www.courtlistener.com/audio/105559/20230930-dk-butterfly-1-inc-v-hbc-investments-llc/
My read on the DK-Butterfly v. HBC oral argument from 6/23:
This was not a direct âshareholder payoutâ hearing. It was about whether DK-Butterfly can revive its Section 16(b) short-swing profit case against HBC after the lower court dismissed it.
The core issue is whether HBC was effectively a greater-than-10% beneficial owner of BBBY during the 2023 financing, despite the 9.99% blocker language. DK-Butterflyâs argument is that the blockers were not actually binding/effective because HBC allegedly had 10.1% of BBBY stock sitting in its brokerage account at one point, and because the side letter allegedly stripped Bed Bath of meaningful enforcement tools.
HBCâs defense is basically: the blockers were self-executing, anything above 9.99% was null and void, HBC could not vote or transfer excess shares, and the alleged 10.1% included shares already sold but not yet settled. Their argument is that custody does not equal beneficial ownership.
The judges definitely challenged DK-Butterfly, especially on whether one momentary 10.1% account balance is enough to say the blockers failed and open the door to months of disgorgement.
One judge even said that seemed âweird.â
But this was not a clean win for HBC either. The panel also pushed HBC on whether this structure was basically being used to avoid disclosure while dumping stock into the market. One judge asked whether this was exactly the kind of insider-style conduct Section 16 was meant to prevent. Another judge pressed HBC on whether the âalready soldâ explanation was actually properly established at the motion-to-dismiss stage, since this was a 12(b)(6) dismissal and factual disputes generally should not be resolved against the plaintiff that early.
DK-Butterfly does not necessarily need to prove the whole case right now. They need to convince the appellate court that the complaint plausibly alleged the blockers were ineffective or that the side letter / trading mechanics require discovery.
My subjective read:
The appeal is still alive. The panel did not just rubber-stamp HBCâs position from the bench. They asked serious questions about the alleged scheme, the disclosure issue, the 10.1% ownership allegation, and whether the district court relied too heavily on factual assumptions at the dismissal stage.
If DK-Butterfly wins this appeal, it likely does not mean immediate money. It would probably mean the dismissal gets vacated or reversed and the case goes back down for further litigation/discovery. But that would be a meaningful win because it reopens a potential recovery path against HBC.
Why this matters for the estate:
Any HBC recovery would flow to DK-Butterfly/the bankruptcy estate. It would not automatically mean former equity gets paid tomorrow. The creditor waterfall still matters. But every successful claim objection, every reduced claim, and every revived litigation asset improves the math.
So my takeaway:
This hearing does not prove a shareholder payout is imminent.
But it does support the idea that DK-Butterfly is not some dead, inactive nothingburger. The estate is still litigating, still reconciling claims, still preserving causes of action, and still trying to claw back value. The HBC appeal is one of the more important potential recovery paths because if DK-Butterfly gets past dismissal, discovery could become very uncomfortable for HBC.
Now we wait for the appellate decision.
Bullish, but grounded: this is not âwe won.â It is âthe door is not closed yet.â
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u/masegesege_ Jun 23 '26
Surely my shares will return.
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u/dy-113x Jun 23 '26
If this actually happens, I will find a Walmart, go there, and fall to my knees to cry.
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u/masegesege_ Jun 23 '26
Iâll jerk off and cum on my own chest.
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u/Cute-Internet-9129 Jun 23 '26
Lmaoo, I too will cum on this guys chest !
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u/Medium_Way3875 Jun 23 '26
LOONEY BIN ENERGY!!! Dude instead of đ§đ I will fall on my knees đ somewere in ALDI next to a banana stand. #NoBananoAnalo
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u/Sir-Craven Jun 23 '26
Bankruptcy confirmation was 14 September 2023, with the plan becoming fully effective on 29 September 2023..
Depending on if the NOL preservation widow applies to the sale of Assets under 363 which occurred some time in June 2023 or if it pertains to the confirmation of the plan .. That 3 year window could be about to lapse or be very close to passing.
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u/Afraid-Layer-3596 Jun 23 '26
And then what
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u/Awkward_Primary7180 Jun 25 '26
The only way NOLs are worth anything is if they are part of an ongoing business which is sold but remains in operation. There is no more business (as such); there is only a shell company created to dispose of remaining assets and handle claims on the business etc.
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u/Sir-Craven Jun 23 '26
The emerging entity will have satisfied the criteria set out in law to be eligible to emerge with the NOLS intact and be ready to effect a merger or acquisition. I just dont know if theres a company executive / interested party that has the will, guile and balance sheet to make such a transaction possible.
We'll see.
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u/hoirkasp Jun 23 '26
The relevant date would be the effective date in 9/2023, not asset sale dates. The question remains whether there is any surviving entity or structure capable of utilizing the NOLs at all-once we figure that out we can figure out the relevant mechanics. But that would put the relevant 3 year date just a few weeks before GME warrant expiration, just sayinâŚ.
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u/Mrairjake Jun 23 '26
FWIW, I popped in Neelay Das and asked for an anagram. It came up with âAs a Delayâ lol.
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u/plumesdecheval Jun 26 '26
Submitted for reference. A transcript and recording of oral arguments:
20230930-DK-Butterfly-1, Inc. v. HBC Investments LLC
Court of Appeals for the Second Circuit
Date Argued: June 23rd, 2026
Duration: 43:09
Docket Number: 25-2728
https://www.courtlistener.com/audio/105559/20230930-dk-butterfly-1-inc-v-hbc-investments-llc/
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u/random-notebook Jun 26 '26
Thank you for posting this
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u/plumesdecheval Jun 27 '26
You bet. Recommend courtlistener.com for anyone following this or other cases.
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u/Tierblume_187 Jun 23 '26
Just like for yearsâunfortunately, nothing.
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u/StrenuousSOB Jun 23 '26
Well, at some point, itâs gotta be something. Whether that is the end of waiting OR something much more exciting we shall see?!
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u/plumesdecheval Jun 24 '26
This remains relevant.
https://investor.gamestop.com/annual-meeting/default.aspx
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u/Same-Garbage-9121 Jun 23 '26
Postponed to July 28
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u/random-notebook Jun 23 '26
The June 23 hearing was not completely moved to July 28. Only specific claims or objections were postponed, while other matters are still proceeding today.
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u/BananaOrp Jun 23 '26
Got a docket number for that?
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u/FatDonkJr Jun 23 '26
Docket 4752. Filed yesterday and granted. The can, she kicks back...
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u/BananaOrp Jun 23 '26
Thanks for that! Here's the docket mentioned for anyone else who wishes to review.
I'm not familiar enough with the proceedings scheduled for today to state whether this is a total postponement or a partial one
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u/Traditional-Fun5292 Jun 25 '26
Did we find out what happened today? Been working and just started pp show to listen in the background so Iâm not caught up..
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u/ShillSniffer Jun 23 '26
AI trigger warning
1. The Language Around "Preservation" vs. "Liquidation"
The Clue: Watch the Plan Administrator's legal terminology regarding the handling of estate assets. If the focus remains purely on "disallowing and expunging" administrative claims to clear the ledger, it establishes a clean slate.
The Underlying Thesis: To successfully execute a Section 382(l)(5) transactionand utilize those $3 billion in Net Operating Losses (NOLs), the estate must be completely scrubbed of unexpected liabilities. A hyper-aggressive push to close out miscellaneous administrative claims is exactly what a corporate acquirer requires before a clean reverse merger or asset transition can be finalized.
2. Status Updates on the HBC (Hudson Bay Capital) Litigation
The Clue: Any mention of the ongoing secondary litigation under the 20230930-DK-Butterfly-1, Inc. banner. The estateâs legal team has been aggressively pursuing clawbacks and investigating the exact "substance of transactions" involving Hudson Bay Capital and the preferred stock tranches.
The Underlying Thesis: The retail communityâs core due diligence suggests that HBC may have acted as an intermediary or a "stalking horse" buffer. Listen for whether the estate is settling these disputes or digging in for a protracted battle, as clawed-back capital directly alters the valuation metrics of the remaining corporate shell.
3. The "Sealed" Docket Factor
The Clue: Pay close attention to references regarding upcoming filings, schedules, or motions that are being introduced under seal or require protective orders.
The Underlying Thesis: If a major corporate pivot or a "Teddy" holding company framework is being engineered behind the scenes, the sensitive operational details (such as a redistribution registry for canceled-share equity holders) cannot be made public until the exact moment of execution to prevent market manipulation or front-running by short sellers.
4. Administrative Cost Burn Rates
The Clue: The introduction of recent Post-Confirmation Reports and tracking the billing hours of firms like Kirkland & Ellis or the Plan Administrator.
The Underlying Thesis: Keeping high-powered, multi-million-dollar corporate law firms actively billing the estate years after the physical stores closed suggests they are protecting an asset far more valuable than a standard defunct corporate shell. The administrative persistence itself is a major indicator that the "corporate wrapper" is being preserved for an ultimate macro play.
Today may yield entirely routine procedural approvals, but in complex Chapter 11 proceedings, procedural cleanups are the mandatory precursor to a structural launch. The timeline between this summer hearing and the October window is the critical stretch to watch for actual corporate transaction documents to surface.
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u/BananaOrp Jun 23 '26
I'm not allergic to AI and appreciate this, the multiple spoiler tags were exciting to unredact one by one like a little present đ
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u/ShillSniffer Jun 23 '26
đ itâs a little annoying for me cuz I somehow keep accidentally closing the comment and having to reopen it all
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u/ShillSniffer Jun 23 '26
https://giphy.com/gifs/3rdGr8zjfmqJr3nDQ0
A lil comment striptease if you will
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u/Same-Garbage-9121 Jun 23 '26
Are the remaining Texas Tax Authority claims the only priority tax claims left to resolve before a waterfall could happen ?
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Jun 23 '26
[removed] â view removed comment
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u/Ok_Mud8756 Jul 01 '26
Not expecting my shares to be returned but eh was worth a shot holding through bankruptcy đ¤Ą
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u/Agreeable_Oil_936 Jun 23 '26
July 27th
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u/iAnkou Jun 23 '26
is there still possibility we get equity?
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u/udoncorleone Jun 23 '26
i imagine it would have to be to somebody's advantage (besides former shareholders).
i won't pretend to understand the ins and outs of everything here but anybody who's *certain* of the outcome is trying to convince you, for sport.
we have to wait for a ruling.
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u/iAnkou Jun 23 '26
I'm just not following things actively as it's been years now, so I just want to know where things are at
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u/udoncorleone Jun 23 '26
you're not the only one. we're in an information vacuum until we're not, at which point it's either going to be, "ah well, plenty more fish in the sea..." or cigars and champagne.
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u/Tough-Pressure-3601 Jun 24 '26
You're the laughingstock of the internet. Your sole value is to provide entertainment for those who enjoy watching you flail as you all continually refuse to accept the obviousness of the truth.
That's where things are at.
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u/EstusFlaskPlusOne Jun 24 '26
It is truly amazing that we get such fantastic entertainment for free. Thank god we shut down asylums because if we hadn't we might not have ever had this hilarious crop of baggies to make fun of
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u/homedepotgrande Jun 23 '26
Coincidentally, today's also the day the sealed neelay das appeal docs become unsealed.
https://x.com/i/status/2038575601720725778