NEW YORK — The bankruptcy court hoping to usher Kmart Corp. back to solvency approved the sale of 54 real estate leases to a joint venture headed by Kimco Realty Corp., according to reports.
Schottenstein Stores Corp. and Klaff Realty, along with Kimco, paid $43 million for the leases, which were bundled together. Kmart will also share in the profits should Kimco receive more for the leases than anticipated.
Troy, Mich.-based Kmart, which filed for bankruptcy Jan. 22, is in the process of closing 283 doors. During the auction for Kmart’s leases, 209 of the properties failed to solicit bids.
The court also approved, on an interim basis, the appointment of Traub, Bonacquist & Fox LLP as lead co-counsel to the equity holders’ committee. Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz Ltd. will also be retained as co-counsel for the equity committee. Final approval of those selections and the lease sales is expected to come on July 24.
Last week, Kmart sought court approval to widen the scope of its probe into pre-bankruptcy operations, including the power to demand documents and compel testimony from former executives and from some of its vendors. Additionally, Kmart asked the court to approve the practice of apprising three separate committees — representing the interests of unsecured creditors, stockholders and other financial partners — on the progress of its investigation.
Kmart said that anonymous tips have helped it in its investigation, but urged those supplying information to come forward without fear of reprisals.
Kmart expects to complete its probe of previous management practices in September, it said.
In New York Stock Exchange trading Monday, Kmart shares dropped 8 cents, or 7.8 percent, to close at 95 cents. The Dow Jones Industrial Average fell another 133.47 points, or 1.4 percent, to finish the day at 9,109.79.”