Court Orders Penske Auto Centers to Continue Operating Auto Service Centers at 550 Kmart Stores Nationwide
TROY, Mich., April 6 Kmart Corporation said today that the United States Bankruptcy Court for the Northern District of Illinois has issued a temporary restraining order against Penske Auto Centers, Inc., and Penske Auto Centers, LLC (``Penske'') requiring them to continue operating auto service centers at more than 550 Kmart stores across the United States.
The order, signed today by Chief Judge Susan Pierson Sonderby, enjoins Penske from taking any action to close or liquidate the Penske Auto Centers owned and operated by Penske Auto Centers, LLC, including any action to refrain from opening or continuing to operate the auto centers for business as usual. Penske informed Kmart on April 5, 2002, that it intended to immediately shut down the operations of the auto centers as of the start of business on Saturday, April 6, 2002.
Kmart had been in discussions with Penske for several weeks regarding a mutually acceptable plan for the future of the auto centers that would protect the interests of the centers' customers. Kmart regrets the precipitous action taken earlier today by Penske and is pleased that the court has issued a temporary restraining order to keep the centers open.
Kmart noted that all of its stores across the nation, including those with auto centers, are open and conducting business as usual today. As today's action by Penske may have caused disruptions at some auto service centers, customers should contact their local Kmart store for more information.
Kmart Corporation is a $37 billion company that serves America with more than 2,100 Kmart and Kmart SuperCenter retail outlets and through its e-commerce shopping site, http://www.bluelight.com .
Safe Harbor Statement
The foregoing, as well as other statements made by Kmart, may contain forward-looking statements that reflect, when made, the Company's current views with respect to current events and financial performance. Such forward looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the DIP facility; the Company's ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 cases on the Company's liquidity or results of operations; the ability of the Company to fund and execute its business plan; the ability of the Company to attract, motivate and/or retain key executives and associates; and the ability of the Company to attract and retain customers. Other risk factors are listed from time to time in the Company's SEC reports, including, but not limited to the quarterly report on Form 10-Q for the quarter ended November 27, 2001. Kmart disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company's various pre-petition liabilities, common stock and/or other equity securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. Accordingly, the Company urges that the appropriate caution be exercised with respect to existing and future investments in any of these liabilities and/or securities