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Windstream Holdings, Inc. Message Board

  • panthers_tampabobcats panthers_tampabobcats Feb 24, 2005 6:56 PM Flag

    LEases

    Question to all you smart ones out there. If Winn dixie closes more stores, will the leases on those stores be taking off the books. In other words, can winn dixie say good bye to those long term leases? your input will be greatly appreciated.

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    • Actually, WD has 120 days from the filing date to file a "plan" (called the "exclusivity period"). After that any interested party can file a plan with the court. That hardly ever happens because the court will grant extension after extension (sometimes for years!) to allow the company the opportunity to restructure themselves...It also allows the professional fees (consultants, accountants, attorneys, etc.) to take their pound of flesh out of WD & any meaningful recovery to the creditors / shareholders in these type of cases...They already had received the judges approval to terminate 150 "dark" store & 2 or 3 warehouse leases & stop making payments on them! This will then come off the books...Look for many more closings to come!
      Bud

      • 2 Replies to anhonestbud
      • In reference to your observation that many more closings may be coming, I have a question for anyone that may have information on the matter. When the 156 stores were closed recently, what, if any, type of severance package was offered to those associates and who qualified? If this question is not applicable to the recent 156 store closings then I pose the same question regarding the stores that were sold/closed in the Dallas/Ft.Worth market a couple of years ago. Were these employees compensated for their years of service or simply told it's over...time to go home? Thanks in advance for any input. DIY26

      • Pardon the question, but isn't all of this meaningless to any stockholder of the current stock since the likelyhood is that after reorganization the stock will go away or be heavily diluted? I appreciate any insight. Thanks

    • Answer:
      When you file Chapter 11 you have 30 to 45 days, determined by the Bankruptcy court to put together your restructuring plan. At that time you must disclose any majors changes, such as closing stores that you have a lease on. The plan will then be reviewed and if the court approves this, then yes, they can get out of paying the extended leases that they signed, but the court will determine and set the rules on how this will be carried out. Once this plan has been approved, no other major changes can be made without going back before the court until they are out of Chapter 11. So, the short answer is yes. Which basically means that Winn-Dixie is going to close a bunch of its old, dirty and non-profitable stores, and then it will be worth something for the short term at least. Probably will be bought out at that time, since it will actually be worth something. This is really the best thing they could have done. Winn-Dixie was very poorly mismanaged for years and is lucky they are getting off this easy.





      Question to all you smart ones out there. If Winn dixie closes more stores, will the leases on those stores be taking off the books. In other words, can winn dixie say good bye to those long term leases? your input will be greatly appreciated.

      • 2 Replies to sec1212892
      • I saw a lot of value there: first $2.59 on book value in a very shrink balance sheet. Second: the 316 millions from "Lease Liability on Closed Facilities" means: 2.24 a share. And finaly: in the last 10Q they wrote down 314 millons in deffered tax assets because the last 2 years of loses... (etc. see last 10Q page 11 (L)). This means 2.23 s sahre, than if they becomes profitable again its an nice tax shield.

      • Yes, but it's better than that. The petition to reject leases on 150 already-closed stores (out of about 1000) was granted. See 5th paragraph below:

        http://biz.yahoo.com/prnews/050223/flw034_1.html

        That's a significant plus up front. Then, sure, unprofitable stores that are still operating can be closed as part of the reorganization plan.

        Finally, Winn Dixie has sales of about $75 per share: more than 100x the cost. Anytime you can buy $75 of annual sales for 70 cents ... do it. There's a way to take home a few percent over a few years, and they'll find it.

    • I think this is the smart target of ch11. Alredy they filed a Motion to Reject" (Motion for Authority to Reject Certain Real Property Leases, Effective as of Petition Date) (See the document at: http://www.loganandco.com/adhocdocs/wdx/wdx--00024.pdf ). That means they can drop 316 millions in "Lease Liability on Closed Facilities" (See last 10Q page 12 (o)). I.E. 316 less debt and 316 more equity. They can also use this way to reject all leases contracts they dont like in the reorganization....

      I am not an expert...

 
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