Fleming Files $1.4 Billion Claim in Kmart Bankruptcy Case
CHICAGO - Fleming Cos. has filed a $1.4 billion prepetition claim in Kmart Corp.'s bankruptcy case, seeking payment for profits it believes would have occurred under a canceled contract, a spokesman said Thursday.
Shane Boyd said the claim, filed with Kmart claims agent Trumbull Services on Tuesday, also includes reimbursement for payments the food supplier continues to make on behalf of Kmart to third parties, Dow Jones newswire reports.
Kmart in February received bankruptcy-court approval to end its 10-year contract with Dallas-based Fleming. The agreement, signed in February 2001, for a time made Fleming the discount retailer's largest single supplier. Kmart filed for federal bankruptcy protection in January 2002.
Boyd said Fleming couldn't speculate about how the claim could be ultimately resolved.
"We obviously believe our claim has appropriate merit," he said.
Though the contract between Fleming and Kmart was slated to end in 2011, Fleming's prepetition claim seeks the payment of lost profits through 2006, the point at which a five-year opt-out clause on the contract could have been initiated, Fleming's Boyd said.
Meanwhile, Fleming amended a previously filed prepetition claim against Kmart to $26 million from $29 million. Boyd said he didn't know the nature of the $26 million claim or the details of why the changes were made.
Separately, as reported, Fleming earlier this week also filed a $30.3 million administrative claim for postpetition expenses related to the Kmart contract, according to court documents.
A Kmart spokesperson didn't immediately return a call from Dow Jones.
Earlier this week, Kmart lead attorney Jack Butler told reporters during a media briefing in New York that the retailer has allocated an allowance for claims it believes to be legitimate.
The allowance is included in a reserve of about $500 million that Kmart has taken related to contract rejections made during bankruptcy, including contracts with Fleming, Butler said.
Shane Boyd said the claim, filed with Kmart claims agent Trumbull Services on Tuesday, also includes reimbursement for payments the food supplier continues to make on behalf of Kmart to third parties, Dow Jones newswire reports.
Kmart in February received bankruptcy-court approval to end its 10-year contract with Dallas-based Fleming. The agreement, signed in February 2001, for a time made Fleming the discount retailer's largest single supplier. Kmart filed for federal bankruptcy protection in January 2002.
Boyd said Fleming couldn't speculate about how the claim could be ultimately resolved.
"We obviously believe our claim has appropriate merit," he said.
Though the contract between Fleming and Kmart was slated to end in 2011, Fleming's prepetition claim seeks the payment of lost profits through 2006, the point at which a five-year opt-out clause on the contract could have been initiated, Fleming's Boyd said.
Meanwhile, Fleming amended a previously filed prepetition claim against Kmart to $26 million from $29 million. Boyd said he didn't know the nature of the $26 million claim or the details of why the changes were made.
Separately, as reported, Fleming earlier this week also filed a $30.3 million administrative claim for postpetition expenses related to the Kmart contract, according to court documents.
A Kmart spokesperson didn't immediately return a call from Dow Jones.
Earlier this week, Kmart lead attorney Jack Butler told reporters during a media briefing in New York that the retailer has allocated an allowance for claims it believes to be legitimate.
The allowance is included in a reserve of about $500 million that Kmart has taken related to contract rejections made during bankruptcy, including contracts with Fleming, Butler said.