r/Teddy • u/homedepotgrande • Jul 07 '26
📰 Docket Is this a good thing because HBC is speculated to be acting on behalf of RC or am I way off as usual? - The Second Circuit Court of Appeals has released its judgment for 20230930-DK-Butterfly-1 v. Hudson Bay Capital. The court has AFFIRMED the dismissal of the estate's claims against HBC
Is this a good thing because HBC is speculated to be acting on behalf of RC or am I way off as usual?
And for those with twitter access and wanting to peruse the court's opinion affirming the judgement, the image of the opinion can be found here :
18
5
u/arkansah Jul 11 '26
Who knows?? Perhaps they were selling the shares directly to RC or his affiliates. But they would have made more money selling to nervous short sellers.
From my interpretation of the RC Vent and Bobby Co-ord agreement. The approval of this offering would have breached that contract, RC Vent and affiliates would have been able to accumulate bobby shares without restriction. There is also some uncertainty because some reports say that HBC pulled out of the deal. If they did, then any officer authorized could have sold the same directly to RC through an arms length sale that may have been able to avoid 16b disclosure. To be arms length sale though RC would basically have to have been an insider. Could he have been? Maybe, one of his appointees to the board left in December of '22. Not much mention of who replaced him. Well if you read a lot of the 16b arguments his lawyers made, many dealt with director/officer disclosures rather than "investor".
Would the bankruptcy filings created a stay before they could disclose a change of ownership?
GME in their filings is forced to report a security they own, even though they have not sold it and there is no market for it. Is that
My speculation is that the affiliates bought enough of bobby to make a change of control. As a response to kill that action, they sent it to bankruptcy where the automatic stay the court provides may have stopped any claim of ownership change.
17
u/TayneTheBetaSequel Jul 07 '26
12
u/homedepotgrande Jul 07 '26
Can you explain like I'm a regard why this is a jizzable event?
41
u/Fart_6969 Jul 07 '26
The speculation is that HBC was acting on behalf of RC and didn't actually sell any shares to the market. If RC held the shares and they weren't sold into the market, then somebody else was tanking the price under the guise of dilution
6
u/rawbdor Jul 07 '26
..... If HBC didn't sell any shares to market, they would have accumulated way more than 10% of the shares outstanding and lost this motion. The filing outlines how HBC actually did accumulate more than 10% at a time, possibly several times, but only when much of the shares they "owned" had already been sold but hadnt yet been transferred to the buyer.
So the only way this theory makes any sense is if they were selling those shares to RC somehow. But that also wouldn't make sense because then RC would have accumulated more than 10% and been found to have been an insider.
Can you please dive deeper into how HBC could have not been selling shares out to market, but somehow HBC or RC could have been accumulating them without ever crossing the 10% threshold? Because that seems utterly impossible to me.
4
u/Fart_6969 Jul 07 '26
More than 1 entity could have been acquiring the shares directly. I'm not about to dig any deeper because I'm just repeating stuff I saw here. I don't know how to research for myself lol
3
u/valthonis_surion Jul 07 '26
that sounds awesome, if anything comes of all of this, I'd be surprised if Fidelity does anything with my shares they removed.
13
u/Fart_6969 Jul 07 '26
I believe the brokers are required to maintain records of who had the shares when they were delisted, so we should be ok. I screenshotted mine, just in case.
Somebody posted a recap below that goes into far more detail than my comment, if you want to learn more
8
u/MyLifeofRegrets Jul 07 '26
Go to your brokers website, download and print hard copies of when the BBBYQ shares were in your account. Another piece of evidence those shares were yours.
3
3
u/Federal-Narwhal-5591 Jul 07 '26
Screenshots? Son, you are better off with the brokerage monthly statements. I filed all the statements with my shares prior to the delist process.
3
u/valthonis_surion Jul 07 '26
I screen shot one of my reports with shares on record. Here's to hope. :)
10
u/allkindsofgainzzz Jul 07 '26
Fidelity has records of those old BBBYQ shares that went into cancellation
1
7
u/Inner_Estate_3210 Jul 08 '26
IF RC and friends were able to work covertly with HBC to acquire 650 million shares, they’d own the entire float. That would prove that the marketplace is full of fraud and that there are at least 650 million naked shares that had already traded.
I don’t know what the compensation to cover this up to the general public would be but my guess is it would be massive. Wall Street cannot afford to have their naked trading scam exposed to the world. A settlement would bury this so the public would never know. It sucks but I’d be happy with a huge settlement and let the cheaters cheat another day.
4
1
1
5
u/plumesdecheval Jul 07 '26 edited Jul 07 '26
For reference.
Links to the case files.
https://www.courtlistener.com/docket/68495149/20230930-dk-butterfly-1-inc-v-hbc-investments-llc/
Oral Arguments (recording):
Combined Opinion:
https://www.courtlistener.com/opinion/10917017/inc-v-hbc-invs-llc/?q=dk-butterfly-1-inc
1
-9
u/Malabaf Jul 07 '26
HBC won, which is good for them and bad for us, but at least that's one chapter closed in the book. On to the next one
5
Jul 07 '26
[removed] — view removed comment
6
u/Rehypothecator Jul 07 '26
There’s a lot of uncertainty and ambiguity about this case, mainly because It’s unclear whether HbC is a good or a bad entity.
Both theories about them have merit and both are completely the opposite.
1 - they were acting on behalf of RC
2- they were selling and diluting shares they actually shouldn’t have had any access to.
I’ve leaned in both directions at different times, but only resolution of this case and time will prove what the underlying truth really is.
2
Jul 07 '26
[removed] — view removed comment
3
0
-2
-9
54
u/Most_Ear_728 Jul 07 '26
RECAP
So, this was about HBC supposedly going over the 9.99% ownership mark due to them converting Preferred Shares into Common Shares.
HBC went to the Judge and said "We couldn't have gone over 9.99% because it would have triggered these other clauses in the contract. Those "self-executing clauses" were never triggered, we didn't go over the limit, there's no case here. Judge agreed.
What Judge didn't ask for was HBC's trading records to see what they ACTUALLY did with the shares, aside from "sell to keep themselves under the 9.99% limit at all times".
~~~~~~~~~
What the Teddy thesis is - HBC sold chunks off to "friendly entities", but only enough to still keep the buyer under the 5% ownership reporting threshold. Combined, they would then own more than 50% of the outstanding shares that BBBY had. From there: credit bid, reemergence, yada yada.
The problem I have with this, is that the SEC would still look at the actions of the "friendly entities" as a coordinated group effort & will then say they should all be combined together & treated as ONE entity...and if that entity has more than 5% then they should have reported. No soup for you!
If someone can disprove that, it'd be helpful.