Kmart May Seek Repayment of Loans
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Kmart Corp., the biggest U.S. retailer to seek bankruptcy protection, may ask former Chief Executive Chuck Conaway and other executives who have left the company to repay millions of dollars in loans.
The company is investigating the executives’ contracts to see whether the circumstances of their departures make the loans forgivable, Kmart attorney Jack Butler said at a meeting with creditors. Kmart also has suspended severance payments to some managers.
“For every dollar that’s not spent, it’s money that can be used to satisfy legitimate debt,” said Charles Tatelbaum, an attorney representing some of Kmart’s suppliers.
The discount retailer made more than $30 million in loans to 63 executives in the year before it filed Chapter 11, court papers show.
Kmart shares fell 6 cents to $1.19 on the New York Stock Exchange.
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