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Kmart request for relief from stay to terminate Footstar master agreement denied
By Caroline Salls
Pittsburgh, May 20 - Kmart Corp.'s motion for relief from the automatic stay to terminate its master agreement with Footstar, Inc. was denied Friday by the U.S. Bankruptcy Court for the Southern District of New York.
The automatic stay was terminated for stores in San Diego, Clearwater, Fla., South Bend, Ind., Deland, Fla., Lawnside, N.J., Denver, Noblesville, Ind., Homer Glen, Ill., Putnam, Conn., and Warren, Mich.
The court said the master agreement for these stores will be terminated when they are converted to Sears Essential stores.
Footstar has until July 20 to vacate the stores in Denver, Noblesville, Homer Glen, Putnam and Warren and until Aug. 10 for the stores in San Diego, Clearwater, South Bend, Deland and Lawnside.
Kmart was also ordered to appear Friday at a show-cause hearing following a motion for a stay pending appeal filed by Footstar Thursday.
Footstar asked the court to stay orders granting Kmart relief from the automatic stay that requires Footstar to vacate some Kmart stores.
Footstar said in its motion that it feels it has a good chance to have the automatic stay enforced in its appeal.
The company said the order negatively impacts its business and results in the loss of customers.
Footstar, a West Nyack, N.Y.-based retailer, filed for bankruptcy on March 2, 2004. Its Chapter 11 case number is 04-22350.
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