Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, January 27. In today's newsletter, Bed Bath & Beyond defaulted on its bank debt. 

Bed Bath & Beyond's banks cut off credit lines. The struggling retailer doesn’t have the funds to repay its banks after they determined the retailer has defaulted on its credit lines.

The home-goods chain said it received a notice of default from JPMorgan Chase & Co., calling for an immediate repayment of all outstanding loans under the credit agreement. The default notice from the banks is unusual even for a company facing a potential bankruptcy and sets in motion a clock for Bed Bath & Beyond to remedy the issues.

As a result of the default, Bed Bath’s interest rate goes up by 2 percentage points, according to the filing, and it is required to put up cash collateral to back letters of credit, which are often tapped for payments to suppliers. The company has $186 million in outstanding letters of credit. Bed Bath & Beyond also faces Feb. 1 interest payments for its unsecured notes.

3M earplug unit stays in control of bankruptcy case. A bankruptcy judge granted 3M Co.’s bankrupt earplug unit Aearo Technologies LLC a 38-day extension for its exclusive right to file a plan of reorganization, despite objections by five bellwether plaintiffs in the mass earplug injury lawsuits filed against 3M and Aearo.

Lawyers of Aearo requested an extension of its exclusivity period until the end of March to allow more time for the ongoing mediation efforts that aim to achieve a global resolution for more than 230,000 injury claims pending before the U.S. District Court in Pensacola, Fla. Two official committees that represent about a half of the injury claimants supported the extension.

Certain bellwether plaintiffs opposed the extension, saying they are not against mediation but want to let Aearo’s exclusivity period expire so that they can propose their own restructuring plan. Judge Jeffrey Graham with the U.S. Bankruptcy Court in Indianapolis overruled the objection, concluding the chapter 11 case is complex enough to deserve additional time. — Akiko Matsuda

Goldman Sachs? A Miami smoothie shop? FTX lists potential creditors. A bankruptcy-court filing by FTX does not disclose the nature of their relationships with Sam Bankman-Fried's erstwhile empire, but the company may have owed them money. 

They run the gamut of tech companies from Apple to Zoom and also extend to a broad range of businesses whose ties to a crypto exchange are less obvious: A pharmacy in the Bahamas, for example, and a smoothie shop in Miami Beach, Fla. The Wall Street Journal also made the list. Another nearly 10 million FTX customers have been redacted for their privacy.

HPS disputes estimated value of AD1 hotels. HPS Investment Partners LLC, a lender owed $165 million in the bankruptcies of eight Florida hotels owned by AD1 Global Hotels LLC, said it believes the lodging operator’s valuations of the properties are “grossly overstated.”

AD1 has said the hotels are valued at between $210.5 million to $262 million. At a hearing Thursday in the U.S. Bankruptcy Court in Wilmington, Del., HPS lawyer Harvey Strickon said the sale of the hotels would yield less than what HPS is owed and that the only realistic course for AD1 is to sell the properties.

AD1 has said it is also seeking an equity investor, with other options including a possible debt refinancing. Mr. Strickon also said HPS disagrees with AD1’s characterization of events, including that HPS acted unreasonably before the chapter 11 filing. — Becky Yerak

Retailer Express closes On $260 million investment from WHP global. Apparel retailer Express Inc. said it completed a deal for a $260 million investment from brand management firm WHP Global. Under the deal WHP will acquire new shares in Express at $4.60 per share, gaining a 7.4% stake in the retailer.

Yehuda Shmidman, chairman and CEO of WHP, will take a seat on the retailer's board. Express plans to use $90 million of proceeds from the deal to pay down high-interest debt, and invest the rest in its omnichannel strategy and acquisitions. Express shares traded at $1.03 per share on Wednesday.

“As our team continues its strong focus on returning the core Express business to growth and profitability... our partnership with WHP Global will allow us to achieve greater scale through non-core domestic licensing opportunities and international expansion,” CEO Tim Baxter said.  — Soma Biswas

U.S. GDP rose 2.9% in the fourth quarter after a year of high inflation. The U.S. economy grew at a solid pace last quarter but entered this year with less momentum as rising interest rates and still-high inflation weighed on demand.

Share your tips, suggestions and feedback with the WSJ Pro Bankruptcy team: Soma Biswas; Alexander Gladstone; Jodi Xu Klein; Akiko Matsuda; Jonathan Randles; Alexander Saeedy; Andrew Scurria; Becky Yerak. 

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