Sleep Number files for Chapter 11 bankruptcy, enters asset sale agreement with Sleep Country Canada
Sleep Number Corporation filed voluntary Chapter 11 petitions on June 12, 2026, in the U.S. Bankruptcy Court for the Southern District of New York. The company entered into a stalking horse asset purchase agreement with SNBR Inc., a subsidiary of Sleep Country Canada Inc., to sell substantially all assets for $415 million in cash, subject to auction and court approval under Section 363 of the Bankruptcy Code. Sleep Number expects to secure up to $260 million in debtor-in-possession financing, including up to $65 million in new money term loans and up to $195 million in roll-up loans from prepetition lenders, bearing interest at SOFR plus 8.00% or base rate plus 7.00%, maturing three months from the DIP amendment date.
Key facts
- Petition Date: June 12, 2026; Chapter 11 filing in U.S. Bankruptcy Court for Southern District of New York, Case No. 26-11399
- Asset Purchase Agreement: $415 million cash purchase price; stalking horse bidder is SNBR Inc., subsidiary of Sleep Country Canada Inc.
- DIP financing: up to $260 million total; $65 million new money term loans (up to $50 million available on interim order entry); $195 million roll-up loans converting prepetition obligations
- DIP interest rate: SOFR plus 8.00% or base rate plus 7.00%; three-month maturity from DIP amendment date
- Base Purchase Price: $415,000,000
- Target Closing Working Capital: $101,363,147
- Adjustment Escrow Amount: $25,000,000
- Cure Cap: $8,000,000
- Break-Up Fee: 3.0% of Base Purchase Price; Expense Reimbursement Cap: $4,000,000
- Designation Rights Period: 60 days after Closing or earlier of confirmation hearing, for designation of executory contracts to assume or reject
Why it matters
Sleep Number's Chapter 11 filing and asset sale to Sleep Country Canada represent a restructuring of the company's unsustainable capital structure; holders of Sleep Number common shares are expected to have no recovery based on the $415 million purchase price, and the company anticipates delisting from Nasdaq as a result of the bankruptcy proceeding.
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Derived from 8-K filed 2026-06-12. Not investment advice. View the source filing on SEC.gov →