Winn-Dixie files bankruptcy plan
Published 5:22 pm Thursday, June 29, 2006
Winn-Dixie Stores Inc. said Thursday it has filed plans to emerge from bankruptcy by the end of October, as the supermarket chain struggles to boost sales and regain customers.
The Jacksonville-based company, which is about two-thirds as large as it was when it filed for Chapter 11 reorganization in February 2005, will present the plan to U.S. Bankruptcy Judge Jerry A. Funk at a hearing later Thursday.
The chain wants Funk to approve the plan on Aug. 4 and set in motion the process to secure approval of its creditors. Winn-Dixie attorney Stephen Busey said it usually takes about 60 days to do that, meaning the chain could have a confirmation hearing in early October and emerge from bankruptcy later that month.
The chain said it has agreed with Wachovia Bank for up to $725 million in exit financing, so it should emerge from reorganization with sufficient funding and liquidity to make significant investments in current stores and to open new stores. The company also expects to have only a minimal amount of long-term debt.
The company also said it planned to keep Peter Lynch as its president and chief executive. In a statement, Lynch said the company has made “tremendous progress in addressing its operational and financial challenges.” He said this has led to significant increases in identical store sales in recent months and improving gross margin. Winn-Dixie cited competitive pressures when it filed for bankruptcy, caught in the crush between Wal-Mart and Publix. About 22,000 employees were laid off when the company exited a number of large markets. It has closed or sold about 360 stores in the Southeast and 12 stores in the Bahamas. It also has closed and sold several distribution centers. The chain now has 527 supermarkets and about 54,944 employees and operates stores in Florida, Georgia, Alabama, Mississippi and Louisiana.