Kmart Corp., the largest retailer to file for bankruptcy protection, said it settled a
$1.47 billion claim by Fleming Cos., the largest U.S. grocery
distributor.
Kmart announced the accord in a court filing yesterday. The
settlement reduces Fleming’s damage claims against Kmart to $385
million from more than $1.47 billion. Additional claims of $30.3
million were cut to $15 million under the agreement.
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Fleming was Kmart’s only grocery supplier until earlier this month. Fleming shares fell 29 percent on Feb. 4, after the
announcement that a 10-year contract to supply Kmart had been
canceled. The agreement spares Kmart of more legal fights over the
dispute as it works to complete a reorganization next month under Chapter 11 of the bankruptcy code.
“The settlement avoids significant legal costs to the estates in connection with the Fleming claims,” the court filing said.The agreement was filed yesterday in federal bankruptcy court in Chicago and made public today.
Bloomberg News
