Carson City Kmart being dismantled after closing
April 15, 2003
A day after the Carson City store closed its doors for the last time, workmen removed the familiar “Kmart” lettering across its front.
Messages heralding the closure were scribbled with markers as a few people bustled in and out on Monday carrying fixtures. The remainder will be auctioned Saturday or can be purchased through a broker.
As the store was being dismantled, a final plan for reorganization of the company was heard in U.S. Bankruptcy Court in Chicago.
The hearing is Kmart Corp.’s last hurdle before emerging from bankruptcy, which is scheduled for April 30. The retailer filed for Chapter 11 protection from creditors 15 months ago.
U.S. Bankruptcy Court Judge Susan Pierson Sonderby will decide whether to accept the reorganization plan, which spells out how Kmart will operate and pay its creditors.
Kmart said some of its subsidiaries voted to reject the plan, but corporate officials remained optimistic.
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“Although no assurances can be made, the company does not believe that these votes against the plan are not material,” a company spokesman said.
Kmart operated 2,114 stores prior to the bankruptcy filing in January 2002. After 15 months, that figure was pared to 1,512 stores. Carson City’s Kmart was among the last to close.
The stores to be closed include those with unprofitable leases, underperformers and those where competitive pressure is high, Kmart officials said.
— Associated Press contributed to this story.
Here is a look at how key groups fared during the reorganization.
— Lawyers/consultants: Kmart paid more than $114.5 million through February. Its lead counsel, Skadden, Arps, Slate, Meagher & Flom in Chicago billed $39.4 million in fees and expenses through last Dec. 31.
— As payoff for seeing Kmart emerge from bankruptcy, 7,800 employees, including Chairman Jim Adamson and President and Chief Executive Julian Day, will get bonuses totaling $150 million. Adamson will get $3.6 million; Day will get $1 million.
— Banks: Kmart owes $1.076 billion for loans made before and after its bankruptcy filing in January 2002. It will get 40 cents for every dollar owed.
— Shareholders walk away with nothing, but can write off the loss on their 2003 taxes.
— As a group, landlords and suppliers are owed $4.3 billion. They’ll recover stock worth only 9.7 cents for every dollar Kmart owes.
— Since the bankruptcy filing, more that 60,000 of the 234,000 workers have lost their jobs.
— Jennifer Bott, Detroit Free Press