Kmart Corp. and its former food distributor, Fleming Cos., have reached a settlement of the financial dispute that has the wholesaler claiming that Kmart owned it $1.47 billion.
Instead, Kmart and one of its investors will pay $37 million in cash to Fleming on March 28, ending whatever relationship still exists between the two companies.
The $37 million figure was arrived at thusly…
Fleming claimed that Kmart owed it $1.47 billion to make up for lost revenue associated with the early termination of their supply agreement. The two companies agreed after Fleming made the claim that they would settle for $385 million. But, because of the reorganization plan under which Kmart is working since its bankruptcy, it actually only owes Fleming 10 percent of that figure, and it is payable in new stock in Kmart. Because Fleming apparently doesn’t want an ownership position in Kmart, it negotiated a lower cash payment of $22 million, plus $15 million for administrative expenses.
Instead, Kmart and one of its investors will pay $37 million in cash to Fleming on March 28, ending whatever relationship still exists between the two companies.
The $37 million figure was arrived at thusly…
Fleming claimed that Kmart owed it $1.47 billion to make up for lost revenue associated with the early termination of their supply agreement. The two companies agreed after Fleming made the claim that they would settle for $385 million. But, because of the reorganization plan under which Kmart is working since its bankruptcy, it actually only owes Fleming 10 percent of that figure, and it is payable in new stock in Kmart. Because Fleming apparently doesn’t want an ownership position in Kmart, it negotiated a lower cash payment of $22 million, plus $15 million for administrative expenses.
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So, the two wounded old dogs that we referred to earlier this week decided to cease hostilities and get on with their respective lives. Gives us hope, not to mention a warm feeling inside…
Maybe you can teach old dogs new tricks.
