A federal district court in Michigan denied Kmart Corp.'s request to dismiss a lawsuit brought by a 401(k) plan participant. The lawsuit, claiming breach of fiduciary duty, says officers and directors at the Troy, Mich., company allowed a large percentage of the plan's assets to be in company stock and did not inform participants about the company's financial condition. A Kmart spokesman says the company does not comment on lawsuits.
The case, in the eastern district of Michigan, may not go to trial until next year while both sides gather evidence in the case, said Robert Myers, partner in the law firm of Dewey Ballentine, representing Kmart.
The lawsuit was filed by plan participant Quincie Rankin shortly after the company filed for bankruptcy protection in January 2002. The company emerged from bankruptcy in May.