Dow Jones reports that Kmart Corp. is objecting to a $1.4 billion claim filed against it by Fleming Cos. in bankruptcy court, calling it “artificially inflated.”
Fleming made the claim earlier this month inn the wake of the collapse of its supply agreement with Kmart. It said that the $1.4 billion represented the profits it would have made under the canceled contract with Kmart, including reimbursement for payments it continues to make on behalf of Kmart to third parties. About $989 million of the amount is related to what Fleming described as minimum purchase requirements under the supply agreement.
However, Kmart says there were no minimum purchase agreements, and that public statements made by Fleming officials about the loss of the Kmart contract have set the actual loss much lower, at less than $190 million.
Kmart declared bankruptcy more than a year ago, and is expected to emerge from protection next month. While there have been persistent rumors about a possible Fleming bankruptcy filing, no such move has been made by the company.
Fleming made the claim earlier this month inn the wake of the collapse of its supply agreement with Kmart. It said that the $1.4 billion represented the profits it would have made under the canceled contract with Kmart, including reimbursement for payments it continues to make on behalf of Kmart to third parties. About $989 million of the amount is related to what Fleming described as minimum purchase requirements under the supply agreement.
However, Kmart says there were no minimum purchase agreements, and that public statements made by Fleming officials about the loss of the Kmart contract have set the actual loss much lower, at less than $190 million.
Kmart declared bankruptcy more than a year ago, and is expected to emerge from protection next month. While there have been persistent rumors about a possible Fleming bankruptcy filing, no such move has been made by the company.
- KC's View:
-
Writing this story, we can’t shake the image of two old, beaten and wounded dogs gasping for breath and struggling for survival as they fight with each other.
We’re watching. But do we care? And do they matter?
In fact, both companies have a lot of work to do to prove that they remain viable, vital presences in the food industry. Or even that they can survive.
