Former Kmart Executives Sued for Diverting $1 Billion
PONTIAC, Mich. - Six former Kmart Corp. executives are being sued by the Kmart Creditor Trust over allegations that they misspent more than $1 billion as the company teetered on the brink of bankruptcy.
The civil suit, filed here Tuesday, accuses former c.e.o. Charles Conaway, c.f.o. John McDonald, and four other executives of breach of contract, breach of fiduciary trust, and unjust enrichment. PricewaterhouseCoopers, Kmart's former auditor, is also named in the suit for negligence.
According to the suit, Conaway allegedly drove two company Jaguars and a Lincoln Navigator, had a chauffeur take his kids to school, and charged Kmart more than $100,000 for home improvements. The suit also alleges that the company spent $230,000 to send 60 employees to Las Vegas.
The trust was formed in April to recoup money for creditors. In September the trust sued six other former Kmart executives to reclaim millions in loans, according to reports.
The civil suit, filed here Tuesday, accuses former c.e.o. Charles Conaway, c.f.o. John McDonald, and four other executives of breach of contract, breach of fiduciary trust, and unjust enrichment. PricewaterhouseCoopers, Kmart's former auditor, is also named in the suit for negligence.
According to the suit, Conaway allegedly drove two company Jaguars and a Lincoln Navigator, had a chauffeur take his kids to school, and charged Kmart more than $100,000 for home improvements. The suit also alleges that the company spent $230,000 to send 60 employees to Las Vegas.
The trust was formed in April to recoup money for creditors. In September the trust sued six other former Kmart executives to reclaim millions in loans, according to reports.
