Kmart Holding Corporation announced that the Board of Directors of the Company has appointed Edward S. Lampert, Chairman and Chief Executive Officer of ESL Investments, as Chairman of the Board. Kmart emerged from bankruptcy court protection Tuesday.
Edward S. Lampert said, “Going forward, Kmart will be led by a Board that has a substantial investment in the Company. This will ensure that decisions will be made by investors who have something to lose, as well as gain. Over the past year I have had the opportunity to get to know many Kmart associates. They are good, hard-working people who deserve leadership committed to creating value. Our Board of Directors intends to provide that leadership and to participate very actively in a future dedicated to making Kmart a success.”
Julian C. Day, Kmart President and Chief Executive Officer, said, “Eddie Lampert has a stellar reputation for building long-term value, based on solid business fundamentals. This Company, its associates and many stakeholders are very fortunate to have him as Chairman. Truly an independent thinker, he challenges individuals to be certain that decisions are based on what really makes sense for the Company. With Eddie’s guidance, I am confident that the Company is poised for a profitable and successful future.”
ESL and its affiliates expect to beneficially own over 50 percent of the common stock of the Company, including the shares obtainable upon exercise of options and conversion of the $60 million convertible note issued to ESL and affiliates and assuming that the Class 5 Claims are reconciled at $4.3 billion. The total shares beneficially owned by ESL and its affiliates, ESL’s co-investor in Kmart, and Third Avenue Management LLC, which invested in common shares of the Company at a closing held earlier today, aggregate over 62 percent of the shares of the Company — and each of these investors is represented on the Company’s Board of Directors.
Mr. Lampert is the Chairman and Chief Executive Officer of ESL Investments, based in Greenwich, Connecticut, a firm he founded in April 1988. After graduating from Yale University in 1984 with a bachelor’s degree in economics, Mr. Lampert worked in the risk arbitrage department of Goldman, Sachs & Co. for a number of years. He is on the boards of AutoNation, Inc. and AutoZone, Inc.
In addition to Mr. Lampert, members of the Board of Directors of Kmart Holding Corporation include: E. David Coolidge III, William C. Crowley, Julian C. Day, William Foss, Steven T. Mnuchin, Anne Reese, Brandon Stranzl and Thomas J. Tisch.
Kmart and 37 of its domestic subsidiaries and affiliates, officially concluded its fast-track reorganization today after completing all required actions and satisfying all remaining conditions to its First Amended Plan of Reorganization, as modified, which was confirmed by the U.S. Bankruptcy Court for the Northern District of Illinois by order dated April 23, 2003.
In accordance with the Plan of Reorganization, which became effective today, the Company completed an internal corporate restructuring in which Kmart became an indirect subsidiary of a newly formed corporation, Kmart Holding Corporation. The Company’s publicly traded shares will be shares of common stock of Kmart Holding Corporation.
