NEW YORK, June 11 (Reuters) - The billionaire activist

investor Ryan Cohen won the dismissal on Tuesday of a

shareholder lawsuit accusing him of profitably cashing out of

Bed Bath & Beyond shares too quickly as the home goods retailer

was hurtling toward bankruptcy.

U.S. District Judge Dale Ho in Manhattan said two former Bed

Bath & Beyond shareholders could not force Cohen to return

profits from selling his estimated 11% stake because the

retailer's subsequent bankruptcy mooted their claims.

The shareholders sued Cohen under a federal law requiring

corporate insiders including large shareholders to give up

"short-swing" profits from buying and selling a company's stock

in a six-month period, with sums being returned to the company.

Cohen founded online pet supplies retailer Chewy

and is now chief executive of video game retailer GameStop ( GME )

.

He became known as "meme king" to ordinary investors who

drove the early 2021 meme stock craze, typically in online

forums. Forbes magazine estimates his fortune at $4.2 billion.

Lee Squitieri, a lawyer for the shareholders, declined

immediate comment, saying he was reviewing the decision. Cohen,

through his lawyer Dave Wollmuth, declined to comment.

Cohen revealed a 9.8% stake in Bed Bath & Beyond in March

2022 and pushed for changes that would include new directors and

exploring a sale of the Buy Buy Baby brand.

He angered other shareholders by abruptly selling his stake,

whose percentage had grown because of stock buybacks, five

months later for an estimated $60 million profit.

Bed Bath filed for bankruptcy in April 2023, and its common

shares were canceled when its Chapter 11 plan became effective

in September.

Ho said the plaintiff shareholders, Todd Augenbaum and

Judith Cohen, had standing to sue when the lawsuit began in

October 2022, but that was no longer true.

He rejected arguments that they still had a financial stake

because they had bought stock in a Bed Bath & Beyond creditor,

could have collected incentive awards or attorney's fees, and

deserved reimbursement for their canceled stock.

The case is In re Bed Bath & Beyond Inc Section 16(b)

Litigation, U.S. District Court, Southern District of New York,

No. 22-09327.