Judge OKs Kmart’s Reorganization Plan

Kmart Corp., the third-largest U.S. discount retailer, won a federal judge’s approval to come out of bankruptcy protection next month after resolving objections from creditors including Wal-Mart Stores Inc.

Kmart’s reorganization plan was almost derailed by a claim from rival Wal-Mart that Kmart infringes its patent for a check-out system. U.S. Bankruptcy Judge Susan Pierson Sonderby’s order gave both sides the right to revisit the dispute.

The plan will let Kmart conclude the largest retail bankruptcy case in U.S. history by early next month after the company closed 599 stores and fired 57,000 workers. It also will wipe out about $7.8 billion in debt and transfers ownership of the Troy, Mich.-based company to creditors, including new investors.