Hudson Bay wins dismissal of Bed Bath trading gains lawsuit

Bed Bath once had more than 1,500 stores and roughly US$12 billion in annual revenue, but sought Chapter 11 bankruptcy protection in April 2023. Photo by James West/The Daily Gleaner/Postmedia files

Hudson Bay Capital Management won dismissal of a lawsuit by the former Bed Bath & Beyond Inc. alleging the hedge fund wrongly sidestepped stock ownership rules during the retailer’s downward spiral.

The lawsuit — filed in May 2024 — sought to recover more than US$300 million in trading profits from Hudson Bay. It alleged the fund violated a law requiring executives and outside investors with stakes exceeding 10 per cent to surrender short-term gains.

The dispute centred on a 2023 offering involving derivatives that helped Bed Bath raise money when it was desperate for cash, acco