In the days after Stein Mart Inc. filed for Chapter 11 bankruptcy, Jay Stein sold his 35.7% stake in the Jacksonville-based fashion retailer, according to a Securities and Exchange Commission filing last week.
Stein and his family had about 17.3 million Stein Mart shares, which were sold in the open market at prices between 11 cents and 18 cents each from Aug. 14 to Aug. 18, according to the filing.
Stein Mart filed its Chapter 11 petition Aug. 12 in U.S. Bankruptcy Court for the Middle District of Florida Jacksonville division.
The company intends to close its 281 stores and go out of the business and said its stock likely will have no value, but the stock has continued to trade on the Nasdaq Capital Market.
Nasdaq said it will delist the stock Aug. 24, but the stock could continue to trade on the over-the-counter Bulletin Board or the Pink Sheets, Stein Mart said.
Stein, grandson of the company's founder, had maintained a significant percentage of the company's stock since Stein Mart's initial public offering in 1992.
According to the Stein Mart website, Stein was a member of the company's board of directors since 1968 and chairman from 1989 to June 2020.
The SEC filing did not say why Stein sold off his shares, but investors in bankrupt companies commonly sell off stock to recognize capital losses on their holdings.
Other Stein Mart insiders also sold off shares after the Chapter 11 filing, according to SEC documents.
CEO Hunt Hawkins sold about 385,000 shares, leaving him with 66,667 restricted shares, SEC filings show.
Stein Mart's most recent proxy statement showed Hawkins with more than 1 million shares, or 2.1% of the stock. But that included unexercised options to buy 631,631 shares.