Weyerhaeuser Seeks To End Kmart Trash Contracts

Date: February 7, 2002

Source: News Room

Weyerhaeuser Co. (NYSE:WY - news) is asking a federal bankruptcy court to let it break a $2 million-a-month contract with Kmart Corp. The company says it faces financial problems unless Kmart pays its outstanding bills, which could total $6.4 million. Two of the company's subcontractors have said they will stop trash pickups at half of Kmart's stores until they are paid. Weyerhaeuser claims that Kmart is 30 days past due on $1.4 million in payments. The Tacoma, Wash.-based company says Kmart also owes $5 million for services rendered before the retailer filed for Chapter 11 protection Jan. 22. Weyerhaeuser's contract is set to expire Jan. 31, 2003. The company and about 200 subcontractors handle waste removal and cardboard recycling for all of Kmart's stores. Chapter 11 gives Kmart protection from businesses seeking to collect on its debt during reorganization. Kmart also is given time to determine which contracts will be maintained. More information: Kmart, www.bluelight.com/.

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