Charles Conaway, the former chairman and CEO of Kmart who has been accused in many quarters of negligence while presiding over the company's financial ruin, has asked the US Bankruptcy Court to allow a Kmart insurance company to help pay for his defense costs in a number of securities lawsuits.
According to a report from Dow Jones, the insurance company has aid it cannot advance him defense costs unless the court decides that it does not violate the bankruptcy code, which generally puts such assets out of reach.
Conaway claims that the insurance policy is not part of Kmart's bankruptcy estate. Dow Jones reports that there are policies that could make available well over $100 million in coverage for directors and officers of the company.
It has been over a year since Kmart filed for bankruptcy protection, and in that time the company has concluded in an internal review that under Conaway management was guilty of "grossly derelict" behavior. There also are US Securities and Exchange Commission (SEC) and a variety of other probes ongoing into the Kmart bankruptcy and the assorted financial dealings of its top executives.
To this point, Kmart has not commented for the record on Conaway's request. A hearing is set for later this month.
According to a report from Dow Jones, the insurance company has aid it cannot advance him defense costs unless the court decides that it does not violate the bankruptcy code, which generally puts such assets out of reach.
Conaway claims that the insurance policy is not part of Kmart's bankruptcy estate. Dow Jones reports that there are policies that could make available well over $100 million in coverage for directors and officers of the company.
It has been over a year since Kmart filed for bankruptcy protection, and in that time the company has concluded in an internal review that under Conaway management was guilty of "grossly derelict" behavior. There also are US Securities and Exchange Commission (SEC) and a variety of other probes ongoing into the Kmart bankruptcy and the assorted financial dealings of its top executives.
To this point, Kmart has not commented for the record on Conaway's request. A hearing is set for later this month.
- KC's View:
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What a joke. Exorbitant salaries and benefits, loans that didn’t have to be paid off, and now the guy doesn't even want to pay his own legal expenses.
And all the while tens of thousands of Kmart employees are being laid off from their jobs, and will have to exist on unemployment and the faint hope that they'll be able to find new work in an unforgiving economy.
We can only hope that the judge laughs him out of the courtroom.
