Much discussion that Woolies were not making enough money to justify survival.
Some of the banks and insurers who worked with the shop, are involved in the UK/US and Irish bank insolvency crises. It was these banks who foreclosed on Woolworths retail, who had over-borrowed and were seriously in debt.
Essentially, it was a cashflow problem for both Woolies and the financiers. Nobody appears to believe anyone can pay their debts and cashflow is one of the key problems which destroys businesses in recessions.