Chicago, Former Kmart CEO Charles Conaway was cleared of wrongdoing in a civil lawsuit that was filed by former creditors of Kmart. The CEO was accused of contributing to Kmart’s 2002 bankruptcy. An arbitration panel unanimously ruled that the Kmart Creditors Trust is not entitled to any damages from Conaway. The trust was created to recover money during Kmart’s reorganization process, giving 2% to shareholders who lost investments when Kmart’s stock was cancelled.
The trust has filed lawsuits against several former Kmart executives, including Conaway, charging that they enjoyed high salaries and other perks while the company was rapidly losing money. The lawsuit against Conaway blamed him for $1.7 billion in economic harm. The panel, however, found that Conaway acted properly in his role and only tried to keep Kmart from going bankrupt.