Shareholders unlikely to receive any money
US grocery store group Winn-Dixie has admitted that its shareholders will probably receive little or no value for their stock when the company emerges from Chapter 11 bankruptcy protection.

The retailer also said it supported a decision by the US Trustee to disband a committee set up to represent the interests of stockholders in its Chapter 11 proceedings. The committee has petitioned the court for reinstatement.

Winn-Dixie said it believes it will be able to reorganise successfully, but it was 'relatively clear' that a meaningful recovery for existing shareholders was unlikely.

The Florida-based company, founded in 1925, filed for bankruptcy last February after it lost market share to competitors such as Wal-Mart Stores and Publix, and expects to emerge from Chapter 11 by June.

Like-for-like store sales rose more than 7 per cent in the fiscal second quarter, excluding 11 stores in New Orleans that have been closed since Hurricane Katrina.

Topics