Bankruptcy Judge Oks Fleming/Kmart Settlement
CHICAGO- A bankruptcy court judge approved a settlement between Kmart Corp. and its former grocery supplier, Fleming Cos., ending a dispute over how much Kmart should pay for breaking a $4.5 billion contract with the Dallas-based distributor, reports Reuters.
As Kmart's biggest supplier, Fleming sought as much as $1.5 billion in compensation after the troubled mass merchandiser terminated what was designed to be a 10-year supply agreement. Fleming will now receive only about $37 million in cash.
The settlement cleared a major hurdle in Kmart's plan to get out of bankruptcy by the end of next month, according to Kmart's lead attorney, who called arrangement "one of the more significant milestones" in the bankruptcy case.
In other Fleming news, the company says it has eliminated two senior executive positions as it seeks to cut 1,800 jobs over the course of the coming months. The former responsibilities of Phil Murphy, s.v.p./supply and Tim LeBeau, s.v.p./operations, will be split among other members of the company's procurement and merchandising staff.
As Kmart's biggest supplier, Fleming sought as much as $1.5 billion in compensation after the troubled mass merchandiser terminated what was designed to be a 10-year supply agreement. Fleming will now receive only about $37 million in cash.
The settlement cleared a major hurdle in Kmart's plan to get out of bankruptcy by the end of next month, according to Kmart's lead attorney, who called arrangement "one of the more significant milestones" in the bankruptcy case.
In other Fleming news, the company says it has eliminated two senior executive positions as it seeks to cut 1,800 jobs over the course of the coming months. The former responsibilities of Phil Murphy, s.v.p./supply and Tim LeBeau, s.v.p./operations, will be split among other members of the company's procurement and merchandising staff.
