Winn-Dixie Court Venue Teeters Again; Bankruptcy Case Just May Stay in New York

Article excerpt

Byline: Mark Basch, The Times-Union

Last week, it looked like Winn-Dixie Stores Inc. would be moving its Chapter 11 bankruptcy proceedings from New York to Jacksonville after the company filed a motion requesting the move. But don't load those case files into the moving van just yet.

Although Jacksonville-based Winn-Dixie's request was prompted by legal actions from smaller creditors who asked the court to move the case, the company's biggest creditors filed motions this week saying they love New York. They want the case to stay right where it is.

U.S. Bankruptcy Judge Robert Drain is scheduled to listen to everyone's arguments at a hearing Tuesday in New York. But at this point, his decision is anybody's guess.

"Trying to predict how a judge will rule is a crapshoot," said University of Florida law professor Jeffrey Davis.

Davis and another bankruptcy law professor, Lynn LoPucki of UCLA, said there weren't any legal precedents to look at to help figure this out.

"There's no way to predict it from the law. The law doesn't say much about this at all," LoPucki said.

Winn-Dixie filed its petition for a Chapter 11 reorganization on Feb. 21 in the U.S. Bankruptcy Court for the Southern District of New York. The company said it chose that venue because most of its creditors have representatives in New York, and that would make things more convenient.

But Alabama-based beverage bottler Buffalo Rock Co. filed a motion on March 14 asking to move the case to the bankruptcy court for the Middle District of Florida, Jacksonville Division, or another Southeastern venue. Buffalo Rock said since most of Winn-Dixie's business operations are in the Southeast and many creditors are located there, a venue in the Southeast would be more convenient. Buffalo Rock's request was supported by motions from Riverdale Farms, a Miami flower importer, and by two former and current Winn-Dixie executives who are concerned about payments owed from retirement plans.

Winn-Dixie filed a motion itself last week asking to move the proceedings to Jacksonville. Although Winn-Dixie said it disagreed with Buffalo Rock's arguments, it said the venue dispute would become a distraction in its efforts to reorganize, so the company agreed to move the case.

But several large creditors weighed in late Tuesday with their arguments that the case should remain in New York, led by the official committee of unsecured creditors in the case.

The committee is a group of seven large creditors appointed by the U. …