Kmart employees who sued to recover pension plan losses before 2003 stand to receive a total of $11.75 million in a proposed settlement, according to court documents.
The proposal, filed Monday in U.S. District Court in Detroit, represents a class of up to 150,000 participants and beneficiaries in Kmart's pension plans. The suit, brought against a group of former Kmart executives and board members in March 2002, argued that participants in two Kmart defined contribution pension plans lost between $28 million and $300 million on their company stock holdings when Kmart's stock price declined significantly as a result of its Chapter 11 bankruptcy protection filing in January 2002, according to court documents. The suit also alleged that the Kmart officials named in the suit misled pension plan participants about the financial health of the company before the bankruptcy filing.
The proposed settlement awaits approval from U.S. District Court Judge Avern Cohn.
Chris Brathwaite, spokesperson for Hoffman Estates, Ill.-based Sears Holding Corp., which completed a deal to acquire Kmart in March, declined to comment.