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Irregular News for 01.20.06
Jacksonville, FL -- Struggling supermarket chain Winn-Dixie is asking a federal bankruptcy judge to approve a $2 million retention bonus for president and CEO Peter Lynch, saying he has helped turn the company around.
The company filed for Chapter 11 reorganization last February and, under Lynch's leadership, has developed a plan to shrink the company and leave unprofitable markets. It has closed more than 300 stores and sold another 81, yielding $40 million, and liquidated 245 stores, yielding $136 million. It also cut the number of district managers from 96 to 30, established marketing and merchandising programs, and developed a trade vendor program.
Lynch is "responsible for the remarkable progress the Debtors (Winn-Dixie) have made toward achieving a successful turnaround of their business and emergence from Chapter 11," according to the motion filed Wednesday.
Lynch would receive the bonus if he stays through Dec. 31. He received a $1.5 million bonus for staying through the end of 2005. The bonuses are on top of his annual salary of $900,000. A court hearing on the bonus is scheduled Feb. 9
The company filed for reorganization after huge losses at the end of 2004 brought on by sagging sales, increased competitive pressures and loss of vendor credit. Lynch, who spent three years as president and chief operating officer at Albertsons Inc., was hired in December 2004, replacing Frank Lazaran, who was forced out by Winn-Dixie's board.
Burt Flickinger III, managing director of Strategic Resources Group, which tracks the supermarket business, thinks the $2 million bonus could be excessive when compared with the pay received by executives of other retailers.
Flickinger said he would rather see Lynch receive a bonus for successful emergence from Chapter 11, rather than just for staying through the end of the year.
In December, the company was given until March 20 to file a plan of reorganization and until May 22 to secure approval of the plan from the chain's creditors.
Winn-Dixie's stock closed at 75 cents a share in over-the-counter trading, up 2 cents a share or 2 percent. In the last 52 weeks, the company's shares have traded from 66 cents a share to $4.00 a share. In 1998, the stock was trading at $59.38 a share and the company was listed on the New York Stock Exchange.
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Jacksonville, FL -- Struggling supermarket chain Winn-Dixie is asking a federal bankruptcy judge to approve a $2 million retention bonus for president and CEO Peter Lynch, saying he has helped turn the company around.
The company filed for Chapter 11 reorganization last February and, under Lynch's leadership, has developed a plan to shrink the company and leave unprofitable markets. It has closed more than 300 stores and sold another 81, yielding $40 million, and liquidated 245 stores, yielding $136 million. It also cut the number of district managers from 96 to 30, established marketing and merchandising programs, and developed a trade vendor program.
Lynch is "responsible for the remarkable progress the Debtors (Winn-Dixie) have made toward achieving a successful turnaround of their business and emergence from Chapter 11," according to the motion filed Wednesday.
Lynch would receive the bonus if he stays through Dec. 31. He received a $1.5 million bonus for staying through the end of 2005. The bonuses are on top of his annual salary of $900,000. A court hearing on the bonus is scheduled Feb. 9
The company filed for reorganization after huge losses at the end of 2004 brought on by sagging sales, increased competitive pressures and loss of vendor credit. Lynch, who spent three years as president and chief operating officer at Albertsons Inc., was hired in December 2004, replacing Frank Lazaran, who was forced out by Winn-Dixie's board.
Burt Flickinger III, managing director of Strategic Resources Group, which tracks the supermarket business, thinks the $2 million bonus could be excessive when compared with the pay received by executives of other retailers.
Flickinger said he would rather see Lynch receive a bonus for successful emergence from Chapter 11, rather than just for staying through the end of the year.
In December, the company was given until March 20 to file a plan of reorganization and until May 22 to secure approval of the plan from the chain's creditors.
Winn-Dixie's stock closed at 75 cents a share in over-the-counter trading, up 2 cents a share or 2 percent. In the last 52 weeks, the company's shares have traded from 66 cents a share to $4.00 a share. In 1998, the stock was trading at $59.38 a share and the company was listed on the New York Stock Exchange.
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