Weyerhaeuser Asks to End Kmart Contract

Danielle Jackson

Troy, Mich. -- Weyerhaeuser Co., Tacoma, Wash., has asked a federal bankruptcy court to let it break a $2 million per month contract with Kmart Corp., claiming that Kmart is 30 days past due on $1.4 million in payments and owes an additional $5 million for services rendered before the retailer filed for Chapter 11 protection on Jan. 22.

According to industry analysts, Kmart is not likely to respond anytime soon. The Chapter 11 status protects the retailer from businesses seeking to collect on debts and provides time to determine which contracts will be maintained while the company reorganizes.

Weyerhaeuser's contract will expire on Jan. 31, 2003. The company and approximately 200 sub-contractors handle waste removal and cardboard recycling for all Kmart stores.