Kmart and Penske Reach Settlement
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Kmart Corp., the largest retailer to seek Chapter 11 protection, and Penske Auto Centers reached a settlement to close more than 550 service centers at the discount retailer’s stores, ending a four-day dispute.
Penske will pay Kmart $6 million and set aside funds to cover some costs of the closings, according to a statement issued by the companies. Penske also will waive a $5-million claim it said Kmart owed related to Kmart’s plans to shut some stores.
The companies will continue to work out details of the agreement and appear in Bankruptcy Court on Thursday to seek approval of the final settlement.
Penske also agreed to pay about $10 million to cover salaries, severance pay and future medical expenses of its roughly 4,000 employees.
Shares of Troy, Mich.-based Kmart rose 2 cents to $1.22 on the NYSE.
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