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Published on 4/18/2006 in the Prospect News Distressed Debt Daily.

Winn-Dixie objects to costly, redundant examination requests

By Caroline Salls

Pittsburgh, April 18 - Winn-Dixie Stores, Inc. objected to requests by several former employees, retirees and unsecured creditors to order the company to submit to an examination, according to a Monday filing with the U.S. Bankruptcy Court for the Middle District of Florida.

According to the objection, the discovery requested duplicates an examination already being conducted by the company's official committee of unsecured creditors and therefore would impose unnecessary expense on Winn-Dixie's estates.

The company also called the examination request "overbroad, unduly burdensome and oppressive."

As previously reported, unsecured creditors Rita Ferguson and Lydia Greenall requested an examination of the amount of self-insurance reserves accumulated and deducted by the company in the two-year period immediately before the filing of its bankruptcy case and Winn-Dixie's grounds for failing to include Win General Insurance, Inc. in the bankruptcy case either as a debtor subsidiary or as an asset of the company.

Former employees and retirees Richard Ehster, Gary Osborne, Scott Hunt, Stan Timbrook and John Gardner requested an examination of dividends paid and other transfers to the company's shareholders, Winn-Dixie's management security plan and surrender of company life insurance policies.

A hearing on both requests is scheduled for Thursday.

Winn-Dixie, a Jacksonville, Fla., supermarket company, filed for Chapter 11 on Feb. 21, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. The case was later transferred to the Middle District of Florida. Its Chapter 11 case number is 05-03817.


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