Sleep Number Corporation and four affiliated debtors filed Chapter 11 petitions on June 12, 2026 in the United States Bankruptcy Court for the Southern District of New York, before Judge Kyu Young Paek.¹ The debtors sold substantially all of their operating assets to SNBR Inc., an affiliate of Sleep Country Canada, Inc., in a sale that closed July 31, 2026, leaving the estate without a standalone operating business.² Since then, the case has functioned as a liquidating estate winding down toward a plan.

Thirty-seven of the case's 685 docket entries to date, more than five percent, were filed between August 24 and September 5, 2026. The rest of this report covers that activity.

The single biggest development of the past two weeks came on September 4, 2026, when the debtors filed the Joint Chapter 11 Plan of Liquidation of Sleep Number Corporation and Its Debtor Affiliates, an 81-page plan,³ together with a 140-page disclosure statement² and a motion asking the court to approve the adequacy of that disclosure statement and the proposed solicitation and voting procedures.⁴ It is the first plan filed in the case. Wind-Down Debtors and a Plan Administrator take over the estate's remaining work under the plan, structured as five separate, non-consolidated plans of liquidation, one for each of the five debtors, filed together only for administrative convenience.

Only Classes 3 and 4 vote. Class 7, existing equity interests in the public parent, is cancelled, released, and extinguished as of the effective date, and holders receive no distribution.³ Class 4 general unsecured claims receive their pro rata share of the "GUC Trust Net Assets," which the plan does not, in the pages reviewed for this report, quantify with a stated recovery percentage. Class 3 prepetition loan claims are allowed in the aggregate amount of $477,500,000.00, less any amounts paid to holders "pursuant to the Paydown Order" before the effective date.³

One day after the plan landed, on September 5, 2026, the debtors filed a motion seeking authority to pay $153.5 million in cash to the prepetition lenders on account of amounts owed under the prepetition loan documents: $135 million immediately upon entry of the order, plus roughly $18.5 million more as certain processor reserve deposits are received.⁵ A declaration from Kent Percy supported the motion,⁶ filed alongside a separate motion to shorten notice so the request could be heard on an expedited basis.⁷

The debtors have proposed, and the court has not yet finally fixed, the following schedule for disclosure statement approval and plan confirmation.⁴

Every date on that list carries the plan's own caveat: the hearings may be adjourned or continued without further notice, and the plan may be modified before or during confirmation. None of it is guaranteed to hold.

The debtors filed two other motions on September 3, 2026, both set for hearing September 17, 2026, with responses due September 10, 2026. The first asks the court to approve omnibus claims objection and hearing procedures.⁸ The second asks the court to extend the deadline for the debtors to file notices of removal of civil actions.⁹

The sale order's designation rights process, under which the debtors continue to determine which leases and contracts to assume and assign to the buyer or reject, generated at least eight separate notices in this window: assumption-and-assignment notices for the fifth¹⁰ through eighth¹¹ designation rights periods, and rejection notices for the sixth¹² and seventh¹³ periods. Objection deadlines on these notices run from September 14 through October 11, 2026. A proof of claim was also filed by Mershops Market SQ Office LLC on September 2, 2026.¹⁴

The official committee of unsecured creditors' deadline to challenge the validity, priority, or extent of the prepetition lenders' liens, set under the final DIP financing order, was extended for a fourth time by stipulation filed August 28, 2026.¹⁵ No adversary proceeding challenging those liens has been filed in the case as of this report.

Responses to the omnibus claims procedures motion and the removal deadline extension are due September 10, ahead of the September 17 hearing on both. Designation rights objection deadlines for the notices filed in this window land September 14 through 18. Disclosure statement objections are due October 2, with the hearing to approve it set for October 15. Confirmation itself, on the debtors' proposed schedule, does not come until December 3.

1. Sleep Number Corporation, No. 26-11399 (S.D.N.Y.) – case record
2. Dkt. 617 – Disclosure Statement for the Joint Chapter 11 Plan of Liquidation, filed Sept. 4, 2026
3. Dkt. 616 – Joint Chapter 11 Plan of Liquidation, filed Sept. 4, 2026
4. Dkt. 618 – Motion to Approve Disclosure Statement Adequacy and Solicitation Procedures, filed Sept. 4, 2026
5. Dkt. 619 – Motion to Authorize Payment of Prepetition Loan Amounts, filed Sept. 5, 2026
6. Dkt. 620 – Declaration of Kent Percy, filed Sept. 5, 2026
7. Dkt. 621 – Motion to Shorten Time on Paydown Motion, filed Sept. 5, 2026
8. Dkt. 608 – Motion to Approve Omnibus Claims Objection Procedures, filed Sept. 3, 2026
9. Dkt. 609 – Motion to Extend Time to File Notices of Removal, filed Sept. 3, 2026
10. Dkt. 601 – Notice of Fifth Designation Rights Period Assumption and Assignment Notice, filed Sept. 1, 2026
11. Dkt. 614 – Notice of Eighth Designation Rights Period Assumption and Assignment Notice, filed Sept. 4, 2026
12. Dkt. 606 – Notice of Sixth Designation Rights Period Rejection Notice, filed Sept. 2, 2026
13. Dkt. 592 – Notice of Seventh Designation Rights Period Rejection Notice, filed Aug. 28, 2026
14. Proof of Claim filed by Mershops Market SQ Office LLC, Sept. 2, 2026
15. Dkt. 590 – Fourth Stipulation with Prepetition Loan Agent Extending Committee Challenge Deadline, filed Aug. 28, 2026