Winn-Dixie Files Bankruptcy
It's been expected for a couple of years given the debt load but its finally happened.
NEW YORK (Reuters)--Winn-Dixie Stores has filed for bankruptcy protection, citing increasing operational challenges since reporting a wider quarterly loss earlier this month.
The supermarket operator said on Tuesday it and 23 of its U.S. subsidiaries filed for Chapter 11 bankruptcy protection, but its 920 Winn-Dixie stores remain open and serving customers.
The company said it had lined up an $800 million debtor-in-possession financing facility from Wachovia Bank, which replaces its previous $600 million credit line.
eWEEK.com Special Report: Mergers & AcquisitionsThe bankruptcy filing comes as the grocer struggled despite a restructuring and a push to improve store operations to draw more customers and cut costs.
Earlier this month, Winn-Dixie said its quarterly loss widened, leaving analysts to wonder how long it could avoid filing for bankruptcy protection. Speculation heated up again last week that a filing was on the way after the company said it had incorrectly calculated a measure of earnings.
The Jacksonville, Florida company said that as part of its Chapter 11 restructuring, it will seek additional asset sales and cut expenses. It also said it is taking steps to reduce its lease obligations on previously closed stores.
Winn-Dixie said it is continuing to pay its associates, with their health and welfare benefits expected to continue without disruption.
Posted by Craig at February 22, 2005 02:31 PM