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NEW YORK - Less than two months after losing its biggest supply contract to Kmart Corp., Fleming Cos. Inc. filed for bankruptcy protection this morning, according court papers filed in Delaware.
The Dallas-based food distributor filed for protection under Chapter 11 of the bankruptcy code, and listed total assets at book value of $4.22 billion and liabilities of $3.54 billion. The company is represented in its bankruptcy filing by Kirkland & Ellis attorney James Sprayregen, who also led bankruptcy filings of UAL Corp. and Conseco Inc.
The news follows two major developments for Fleming last week, including a bankruptcy court judge approving a $37 million in cash settlement between the wholesale distributor and Kmart Corp., as well as a report that Fleming was reportedly talking to vendors about "near-term liquidity constraints" while seeking alternative financing to stay afloat.
As Kmart's biggest supplier, Fleming sought as much as $1.5 billion in compensation after the troubled mass merchant terminated what was designed to be a 10-year supply agreement in early February. Prior to breaking the contract, Kmart accounted for some 20 percent of Fleming's sales, which were estimated to represent $4.5 billion.