Winn-Dixie announced yesterday that it supports the disbanding of an equity committee set up to represent the interests of the company’s shareholders during its bankruptcy proceedings.
The company said that when it emerges from Chapter 11 protection, probably later this year, it is “relatively clear” that there will be no “meaningful recovery” by existing shareholders of money lost on the company to this point.
The committee has petitioned the court for reinstatement. No decision has yet been reached.
The company said that when it emerges from Chapter 11 protection, probably later this year, it is “relatively clear” that there will be no “meaningful recovery” by existing shareholders of money lost on the company to this point.
The committee has petitioned the court for reinstatement. No decision has yet been reached.
- KC's View:
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It is always the existing shareholders, the people who sunk money into the company on the good faith presumption that management was going to be effective and efficient, who take it on the chin in these cases.
We know this is all standard operating procedure, but we just think it sends the wrong message when existing shareholders lose their shirts, even while the board proposes paying the CEO $2 million as a retention bonus to stick around the finish the job he started.
