Winn-Dixie Requests Reorganization Plan Extension and Employee Retention Plan
JACKSONVILLE, Fla. -- In an effort to further develop its reorganization plan while retaining its best employees, Winn-Dixie Stores, Inc. here on Friday filed two motions in the U.S. Bankruptcy Court. The first motion asked leave to extend by 120 days its deadlines for filing a plan of reorganization, and the second requested permission for the implementation a retention plan for approximately 290 Winn-Dixie employees, as well as a severance plan that would cover all Winn-Dixie employees.
The hearing date scheduled for both motions is June 16. An objection deadline has been set for June 9.
In the first motion, Winn-Dixie requested permission to extend its exclusive proposal period for approximately 120 days, to Oct. 19, and to extend its exclusive solicitation period also for approximately 120 days, to Dec. 20.
In the filing, Winn-Dixie said the exclusive periods are intended "to afford the debtors a full and fair opportunity to rehabilitate their businesses and to negotiate and propose one or more reorganization plans without the disruption and deterioration of their businesses that might be caused by the filing of competing plans or reorganization by nondebtor parties." The retailer noted that it has made "significant progress toward rehabilitation since the petition date."
Winn-Dixie argued that its case is large and complex, as its financial structure consists of an $800 million debtor-in-possession secured financing facility, and includes thousands of creditors and other parties interested in its cases. Additionally, Winn-Dixie is the ultimate parent of a group of companies that includes the 24 debtors in its cases.
In the second filing, Winn-Dixie asked permission to implement an expanded retention plan for 290 key employees, including its c.e.o., Peter Lynch; and a comprehensive severance program covering all employees. The new retention plan would replace an existing one, and would provide for periodic retention incentive payments, ranging from 25 percent to 150 percent of the key employees' respective annual salaries. Participants who terminate their employment voluntarily would be exempt, but those who are terminated due to a reduction in work force, retirement, disability, or death would be entitled to receive a pro rata retention payment.
Additionally, each new employee hired by Winn-Dixie would, at the discretion of the c.e.o., be eligible to receive a retention incentive commensurate with those of his or her peers.
Total payments made under the Chapter 11 retention plan would not exceed $13,977,093.
The corporate benefits severance program would formalize Winn-Dixie's prior severance practice and would provide for severance benefits for each of its executives and employees during the Chapter 11 cases, according to the filing.
Executives and employees who voluntarily terminate their employment or are terminated by Winn-Dixie for cause would not be entitled to the severance benefits.
The hearing date scheduled for both motions is June 16. An objection deadline has been set for June 9.
In the first motion, Winn-Dixie requested permission to extend its exclusive proposal period for approximately 120 days, to Oct. 19, and to extend its exclusive solicitation period also for approximately 120 days, to Dec. 20.
In the filing, Winn-Dixie said the exclusive periods are intended "to afford the debtors a full and fair opportunity to rehabilitate their businesses and to negotiate and propose one or more reorganization plans without the disruption and deterioration of their businesses that might be caused by the filing of competing plans or reorganization by nondebtor parties." The retailer noted that it has made "significant progress toward rehabilitation since the petition date."
Winn-Dixie argued that its case is large and complex, as its financial structure consists of an $800 million debtor-in-possession secured financing facility, and includes thousands of creditors and other parties interested in its cases. Additionally, Winn-Dixie is the ultimate parent of a group of companies that includes the 24 debtors in its cases.
In the second filing, Winn-Dixie asked permission to implement an expanded retention plan for 290 key employees, including its c.e.o., Peter Lynch; and a comprehensive severance program covering all employees. The new retention plan would replace an existing one, and would provide for periodic retention incentive payments, ranging from 25 percent to 150 percent of the key employees' respective annual salaries. Participants who terminate their employment voluntarily would be exempt, but those who are terminated due to a reduction in work force, retirement, disability, or death would be entitled to receive a pro rata retention payment.
Additionally, each new employee hired by Winn-Dixie would, at the discretion of the c.e.o., be eligible to receive a retention incentive commensurate with those of his or her peers.
Total payments made under the Chapter 11 retention plan would not exceed $13,977,093.
The corporate benefits severance program would formalize Winn-Dixie's prior severance practice and would provide for severance benefits for each of its executives and employees during the Chapter 11 cases, according to the filing.
Executives and employees who voluntarily terminate their employment or are terminated by Winn-Dixie for cause would not be entitled to the severance benefits.