NEW YORK — Kmart Corp. on Tuesday said it has received interim approval from the Chicago bankruptcy court of $1.15 billion of its $2 billion debtor-in-possession financing facility.

A final hearing for approval of the entire DIP is set for March 6. In addition, Kmart said it has received court approval to continue to provide wages and benefits to associates, and has received from key vendors assurances that are resuming merchandise shipments to the discounter. Other vendors indicated that they too will be resuming shipments on normal terms.

Charles C. Conaway, chief executive officer, said in a statement that the “commitments we have received from the vendor community have allowed us to remain focused on serving customers, a top priority during the restructuring process.”

According to court records, the court on Friday granted interim approval for the discounter to enter into an agreement with James Adamson, who was named the retailer’s chairman on Jan. 17.

Kmart also received court approval to reject certain unexpired real estate leases involving previously closed locations, as well as approval procedures for rejecting certain other unexpired leases. The initiative, Kmart said, is expected to help the company save $250 million annually when completed.

As reported, the company filed for Chapter 11 bankruptcy court protection on Jan. 22 amid financial difficulties and a merchandise crunch as some vendors, including principal food supplier Fleming, stopped shipments of orders in the two weeks preceding the filing.

load comments
blog comments powered by Disqus