Winn-Dixie's Exit from Bankruptcy Still Awaits

JACKSONVILLE, Fla. -- At a hearing on Friday, a U.S. Bankruptcy judge did not say whether he thought Winn-Dixie Stores, Inc. had met the requirements to be able to emerge from Chapter 11 bankruptcy protection, as witnesses either testified that the company had been doing better or had not changed its ways enough to be a viable competitor.

Judge Jerry Funk said he would reach a decision in coming days, according to an Associated Press report. Winn-Dixie has said it expects to resume profitability in fiscal year 2008.
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Witnesses testified during the hearing that although Winn-Dixie is still losing money, its sales are higher, overhead is lower, and liquidity and vendor credit are better.

The retailer's liquidity has grown from $125 million to $324 million in the past year, noted Paul Huffard, senior managing director for The Blackstone Group, which is Winn-Dixie's investment banker. Its liquidity is expected to increase to $375 million when the company emerges from bankruptcy.

Friday's hearing could continue into this week due to opposition from shareholders whose stock is now worthless, according to the Associated Press. Some of those shareholders testified at the hearing on Friday.
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