CHICAGO, Feb. 7 (UPI) -- Lawyers for former Kmart Chairman and Chief Executive Officer Charles Conaway have asked a U.S. bankruptcy court judge for help to pay his legal bills.
Conaway's lawyers filed papers in bankruptcy court Thursday asking Kmart's insurance company to finance his legal defense in suits filed by employees and shareholders.
The former CEO is under investigation by the Securities and Exchange Commission for financial decisions that led to the retailer's fall in the largest Chapter 11 bankruptcy in U.S. history in January 2002. Conaway earned $22.7 million in salary and benefits during the 20 months he ran the company, including a controversial $5 million retention loan in 2001.
An internal Kmart investigation concluded Conaway and other former top executives were "grossly derelict" in their duties, spending money on corporate jets and junkets at a time when the company was in a worsening cash crisis.
Conaway is represented by the Chicago law firm of Sidley Austin Brown & Wood, which typically bills clients between $450 and $600 an hour.
"These payments are vital to Conaway's effective defense of litigation and of other threatened claims in connection with his service to Kmart as chairman and CEO," the filing said. An attorney for Conaway called the filing a formality.
Judge Susan Pierson Sonderby said she would make a ruling on the motion at the scheduled Feb. 25 hearing on Kmart's bankruptcy case.
