Sleep Number Corp 8-K

What Happened

• Sleep Number Corporation and its subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York on June 12, 2026 (In re: Sleep Number Corp., Case No. 26‑11399). The filing triggered an event of default under its prepetition credit agreement and accelerated certain debt obligations.
• The company says prepetition lenders are expected to provide debtor‑in‑possession (DIP) financing of up to approximately $260 million (including up to $65M of new‑money term loans and up to $195M in “roll‑up” loans), subject to Bankruptcy Court approval and customary conditions. Interest is expected to be SOFR + 8.00% (or base rate + 7.00%) with an expected scheduled maturity about three months from the DIP amendment.
• Concurrently, Sleep Number entered a stalking‑horse Asset Purchase Agreement with SNBR, Inc. (a Sleep Country Canada subsidiary) for the purchase of substantially all assets for $415 million in cash plus assumption of certain liabilities, subject to higher bids, court approval and other customary conditions.

Key Details

• Filing date: June 12, 2026; Court: U.S. Bankruptcy Court, Southern District of New York; Case No. 26‑11399.
• Proposed DIP financing: up to ~$260 million total (≈$65M new money; ≈$195M roll‑up), interim/final court orders required.
• Stalking‑horse purchase price: $415 million cash (plus assumed liabilities); sale to be run under Section 363 with bidding procedures and possible auction.
• Company warns common shareholders are “significantly out of the money,” likely to have no recovery, and expects Nasdaq delisting.

Why It Matters

• For creditors and suppliers: the DIP financing and roll‑up loans, if approved, provide immediate liquidity and priority claims to support operations during the Chapter 11 sale process. The filing also accelerates prepetition debt obligations, increasing urgency for restructuring or sale.
• For shareholders: the stalking‑horse purchase price and the company’s statement indicate common shares are likely to receive little or no recovery and may be cancelled; trading is highly speculative and delisting from Nasdaq is expected.
• For investors generally: the company is pursuing a court‑supervised sale and debtor‑in‑possession financing rather than a negotiated merger or recapitalization; outcomes depend on the auction process, court approvals, satisfaction of DIP conditions and timing of the Chapter 11 cases.