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JACKSONVILLE, Fla. – Winn-Dixie Stores said last night that the U.S. Bankruptcy Court gave it the green light for the relief the beleaguered chain requested in a series of court filings known as "first day motions." The orders issued by the court will help the company continue to
operate its business during the reorganization process.
Winn-Dixie filed more than 25 First Day Motions to support its associates and vendors, together with its customers and other stakeholders. On February 21, 2005, as part of its voluntary filing to reorganize under Chapter 11.
Among other things, the Court granted interim approval for the chain's request to: continue payment of salaries, wages and health and welfare benefits to associates; pay vendors for goods and services provided on or after February 22, 2005; reject the unexpired leases of approximately 150 previously closed stores and two previously closed warehouses; and continue honoring obligations to its customers under the company's Customer Rewards Card program.
The court also granted interim approval for Winn-Dixie to access up to $600 million of its new $800 million debtor-in-possession (DIP) credit facility from Wachovia Bank, N.A. The DIP credit facility, which replaces the company's previous $600 million credit line, will be used to supplement its cash flow during the reorganization. A hearing for final approval of the entire DIP facility has been scheduled for March 15, 2005.
A hearing for final approval of all of the other first day motions, including several that were deferred, has been scheduled for March 4, 2005.
All 920 Winn-Dixie stores in the U.S. and the Bahamas are open, and the company said yesterday that business is operating smoothly. "I am very proud of our associates, who have reacted to the news of our reorganization with their heads held high and their focus squarely on serving our customers," Peter Lynch, president and c.e.o., said. "Our vendors have also been supportive. Our stores are well stocked and we are conducting business as usual."