DETROIT – Buyers of Kmart Corp. securities filed a class-action lawsuit Friday against the retailer, which announced earlier in the day that it was closing 284 stores as part of its bid to escape bankruptcy.
It was the third class-action suit filed in the past two weeks against the Troy, Mich.-based retailer. Like the others, it names CEO Chuck Conaway as the sole defendant; the corporation has been protected from lawsuits since it filed for Chapter 11 bankruptcy protection on Jan. 22.
The newest complaint was filed in U.S. District Court in Detroit byaw firm said in a press release that between May 17 and Jan. 25, Conaway and Kmart said the retailer made deceptive statements about a comprehensive restructuring of its operations.
Those statements artificially inflated the price of Kmart securities. and were materially false and misleading, the statement said, because they failed to disclose and misrepresented key facts, including "that Kmart's purported revitalization was a complete failure as the company was continuing to lose market share to competitors and the company's purported efforts to reverse this trend were not meeting with success."
Identical language was contained in another law firm's press release announcing a class-action lawsuit filed Wednesday against Conaway on behalf of people and companies that bought Kmart common stock between May 17 and Jan. 22.
A third law firm filed a similar suit on Feb. 22.
Kmart spokesman Jack Ferry said neither Conaway nor the company would comment on any pending litigation.
In trading on the New York Stock Exchange, Kmart shares rose 5 cents to $1.29.