(Bloomberg) -- Former Bed Bath & Beyond Inc. employees say they haven’t been paid promised severance, the latest sign of the worsening financial squeeze at the home-goods retailer.

Some former employees received an email on Jan. 26 from the human resources department that read, in part: “We are reaching out to you to inform you that there has been a delay with your payment,” according to copies viewed by Bloomberg News. “We recognize the challenges this may cause and appreciate your patience as we work to provide an update.” 

Former staffers who raised concerns about their severance pay in recent days received an additional email. They asked not to be identified out of concern it would jeopardize their payments. 

“We are working to provide you with an update, and we are aiming to be back in touch by Wednesday, February 8,” the message said. The email didn’t explain the significance of that date.

A Bed Bath & Beyond spokeswoman didn’t respond Thursday to requests for comment. Shares were up 3.6% in New York trading at 9:40 a.m. Friday. The stock, which attracted the attention of meme-stock traders, has been volatile in recent weeks, and is up 148% in the last month — even after the company warned of the potential for a bankruptcy filing. 

Severance pay often becomes a contentious point in bankruptcy proceedings. Some critics of the US bankruptcy process say the system offers rich compensation to the executives and advisers in charge of dismantling a company, but little to rank-and-file workers who stay on to help wind down operations. 

Read more: Bed Bath & Beyond’s spiral quickened as suppliers lost patience

In bankruptcy, former employees’ prospects for getting their severance depend on their situations. Those owed less than about $13,000 could get payments quickly and in full as long as they earned the payout within 180 days of a bankruptcy filing, according to US bankruptcy rules.

The delayed payments underscore the mounting financial distress for one of the largest home-goods retailers in the US. On Wednesday, the company confirmed it missed interest payments on its bonds. Last week, Bed Bath & Beyond received a default notice from its loan agent, JPMorgan Chase & Co., warning that it didn’t have enough funds to make payments.

Management’s efforts to find a buyer in bankruptcy have stalled in recent days as well, Bloomberg News has reported. That potentially puts the chain on a path toward liquidation.

On Jan. 10, Bed Bath & Beyond said it was firing an unspecified number of employees. In August, the retailer dismissed about a fifth of its corporate and supply-chain staff, without specifying the number of employees who would be affected.

At its peak in 2017, Bed Bath & Beyond had around 65,000 employees. Since then, its headcount has dwindled to fewer than 30,000.

--With assistance from Jeremy Hill.

(Updates with share price in fifth paragraph.)

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