Dow Jones reports that Kmart Corp. has created a new and independent trust that will be responsible for deciding whether to file lawsuits against former executives for financial wrongdoing.
The trust will exist for at least three years, be initially funded by a $5 million donation by Kmart, and will have access to all the internal investigation materials generated by Kmart. Any money recovered by the rust will go to paying off the company’s creditors.
The big target for the trust could well be former Kmart CEO Charles Conaway, who the company has described as being :”grossly negligent” during his tenure at Kmart. Conaway has denied the accusations and said that he will not be a scapegoat for the company’s problems.
Kmart’s reorganization plan was approved by the courts this week, and it is expected to emerge from bankruptcy protection early next month.
The trust will exist for at least three years, be initially funded by a $5 million donation by Kmart, and will have access to all the internal investigation materials generated by Kmart. Any money recovered by the rust will go to paying off the company’s creditors.
The big target for the trust could well be former Kmart CEO Charles Conaway, who the company has described as being :”grossly negligent” during his tenure at Kmart. Conaway has denied the accusations and said that he will not be a scapegoat for the company’s problems.
Kmart’s reorganization plan was approved by the courts this week, and it is expected to emerge from bankruptcy protection early next month.
- KC's View:
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Memo to Conaway: Yes, you will be a scapegoat for the company’s problems. That’s what happens when you take the top job and blow it.
You don’t get to take the top job, pay yourself a big salary, get all sorts of other financial benefits, and then say you’re not to blame when the company goes into the tank.
We’d be shocked if the trust didn’t decide to go after Conaway.
