Bed Bath & Beyond Lawsuit: Will COVID-19 Cause A $252 Million Deal To Fall Apart?

The coronavirus is taking a toll on Bed Bath & Beyond (BBBY) as the company announced that it was closing stores, furloughing employees, and now is reportedly seeing a deal for the sale for one of its businesses fall apart.

The retailer made $252 million agreement with 1-800-Flowers to buy the assets of its flower and gift basket business Personalization Mall back in February, which was slated to close on March 30. 1-800-Flowers is now looking to delay the closure of the deal by month to April 30, saying it lacks the resources to close the deal and integrate Personalization Mall because of the COVID-19 outbreak, Reuters reported.

Bed Bath & Beyond has now requested a judge to hold 1-800-Flowers accountable for the deal, despite the impact of the coronavirus pandemic, with the company reportedly saying in its court filing, “ Even a calamitous event such as COVID-19 does not permit a party to avoid its obligations.”

Arguing that it wanted to move forward with the deal in a month, 1-800-Flowers said, “ “While we still desire to proceed with the transaction, we maintain that the conditions to closing the transaction have not been satisfied in light of the consequences of the COVID-19 pandemic, including the shut-down of the PersonalizationMall.com facilities until at least April 30, 2020,” according to the news outlet.

In the deal between Bed Bath & Beyond and 1-800-Flowers, a “material adverse effect” clause reportedly existed, which would allow the online flower retailer to terminate the sale if an event had a negative impact on Personalization Mall, but not a broader economic impact.

Shares of Bed Bath & Beyond were up 12.2191% as of 3:12 p.m. EDT on Friday.