Winn-Dixie's planned move to Florida draws creditor objections

New York, April 5 - Winn-Dixie Stores, Inc.'s plan to move its bankruptcy case to the U.S. Bankruptcy Court for the Middle District of Florida met with objections from some creditors Tuesday.

The official committee of unsecured creditors said the proceedings should stay in the Southern District of New York because that was what most creditors preferred.

In addition, New York is more convenient, there have already been significant rulings in New York and costs will be lower.

Various landlords also objected.

Edens & Avant, Weingarten Realty Investors, Palm Springs Mile Associates, Ltd., Villa Rica Retail Properties, LLC, ALG LP and Curry Ford, LP in a joint filing agreed with the unsecured creditors that the case should stay in New York.

They said the location is more convenient and the court has more experience with a large and complex case.

On the other side, Ernst Properties, Inc., the landlord of Winn-Dixie Montgomery, Inc. in Jefferson Parish, Louisiana, agreed with Birmingham, Ala., beverage bottler and creditor Buffalo Rock Co. that the case should be transferred, either to the Middle District of Florida or the Eastern District of Louisiana.

Buffalo Rock filed the original request to change the venue, claiming Winn-Dixie's ties to New York were "tenuous," while a large number of the creditors and the company's principal place of business are located in Florida.

"The only reasonable conclusion to be drawn is that the debtors have engaged in blatant forum shopping in an effort to neutralize creditor involvement in these bankruptcy cases," Buffalo Rock said in its request.

Buffalo Rock claimed Winn-Dixie fabricated the New York venue since it incorporated a subsidiary in New York on Feb. 9, 12 days before the company's bankruptcy filing. The incorporation was done through Dixie Stories, Inc., a subsidiary of Winn-Dixie Stores, the parent company.

Buffalo Rock said that 19 out of the remaining 23 entities that also filed for bankruptcy are incorporated in Florida while the others are incorporated in South Carolina, Mississippi, Texas and Delaware.

The creditor also said the company's "apparent center of business" is in Jacksonville, Fla., and all 24 debtors, including Dixie Stores list Duval County, Fla., as the principal place of business.

Buffalo Rock also stated that only one of the company's 40 largest trade creditors and 10 largest unsecured institutional creditors are located in New York. Most of the other creditors are located in the southeastern part of the United States. The majority of the company's assets are also located in Jacksonville, Fla.

Riverdale Farms, Inc., a Miami-based fresh flower seller subsequently supported Buffalo Rock's request.

Winn-Dixie then agreed to support the change, saying it wanted to "minimize disruption to their on-going reorganization efforts" - not because it agrees with two creditors' requests.

Winn-Dixie said it had concluded that "speculation and arguments relating to venue have become a distraction from the reorganization process, and that protracted litigation over venue would only detract from their ability and that of their major constituencies to address the fundamental issues that they seek to resolve in these chapter 11 cases."

It added that it had agreed to the change even though it disagreed with the objection to the venue and said it believed its original decision to file in New York was "entirely legal and proper."

Winn-Dixie filed for Chapter 11 on Feb. 21 in the U.S. Bankruptcy Court for the Southern District of New York. Its case number is 05-11063.

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