Activision Expects Little Damage From Kmart Bankruptcy23 Jan, 2002 By: Hive News
Executives at video game maker Activision, Inc. said that the company does not expect that Kmart Corp.'s bankruptcy to have any material impact on Activision's earnings.
Activision stopped shipping products to Kmart late last month, the company said. For the past nine months of fiscal year 2002, Kmart represented less than 2.5 percent of Activision consolidated revenues.
"We have been monitoring Kmart's financial situation for several months now," said Activision president and
COO Ron Doornink. "As part of our prudent planning, we maintain credit insurance and conservative reserve and
credit policies specifically for these types of situations."
In related news, a research company called Bankruptcy Creditors' Service, has already announced plans to publish a weekly e-mail update of the proceedings every 10 to 20 days under the banner Kmart Bankruptcy News.
The company is offering a free sample copy of the first issue at http://www.bankrupt.com/kmart.txt, but will charge $45 each for subsequent installments. The first issue includes:
* background information about the Company's operations and finances;
* data extracted from the Debtors' bankruptcy petitions;
* a consolidated list of the Debtors' 50-largest unsecured creditors;
* a calendar of the key dates and deadlines in the Debtors' chapter 11 case; and
* pointers to key pre-petition contracts and agreements (like the Fleming distribution agreement and the Martha Stewart license agreement)
An issue later this week promises:
* the Debtors' applications to employ Skadden, Arps, Slate, Meagher & Flom as their bankruptcy counsel, Dresdner Kleinwort Wasserstein as their financial advisor, and the other restructuring professionals that will steer management through the bankruptcy process;
* the operational and financial impact of the various first-day motions before the court that are necessary to maintain stability from customers' and employees' perspectives;
* a detailed look at the $2 billion financing pact arranged by JPMorgan Securities, Inc. and Fleet Securities, Inc., and the various covenants buried in those complex documents that will give a preview to the direction Kmart's restructuring will take; and
* the United States trustee's plans and efforts to form one or more official committees to represent the interests of the debtors, creditors and shareholders.