Winn-Dixie Stores emerges from bankruptcy 21 months after filing for Chapter 11 protection
Tuesday, November 21st 2006, 1:00 pm
By: News On 6
JACKSONVILLE, Fla. (AP) _ Winn-Dixie Stores Inc. emerged from bankruptcy Tuesday, 21 months after the grocery chain filed for Chapter 11 protection due to huge financial losses caused by competitive pressures.
The new Winn-Dixie is much smaller than the troubled company that filed for bankruptcy on Feb. 20, 2005.
It has 522 stores in five states and employs about 55,000 people. It had 920 stores in eight states and the Bahamas and 79,000 employees when it sought bankruptcy protection.
The company has also sold warehouses, manufacturing plants and corporate jets.
U.S. Bankruptcy Judge Jerry Funk approved the company's reorganization plan Nov. 9 after creditors approved it last month.
``We are exiting bankruptcy having achieved the restructuring objectives we set out when the company first filed its Chapter 11 petition in February 2005,'' Winn-Dixie president and CEO Peter Lynch said Tuesday.
The company and 23 of its subsidiaries and affiliates filed bankruptcy protection after suffering financial losses and a lack of vendor credit amid intense competition from Wal-Mart Stores Inc. and Publix Super Markets Inc.
The Jacksonville-based company is emerging from bankruptcy with $725 million in exit financing from Wachovia Corp., new stock and a new board of directors.
Lynch will remain with the company and will also be chairman of its board of directors.
Winn-Dixie said it will have sufficient financing and liquidity to make investment in its current stores and develop new stores. The company says it will have only a minimal amount of long-term debt on its balance sheet.
The reorganization plan projects the company will return to profitability beginning in its next fiscal year that starts in June. Winn-Dixie has reported losses of almost $1.3 billion over the past three years.
Winn-Dixie now operates stores in Florida, Alabama, Louisiana, Georgia and Mississippi.