KMART TURNS TO BOTTLE FOR BOOST

TROY, Mich. -- Kmart Corp. here said last week a U.S. Bankruptcy Court in Chicago has granted the company an emergency order allowing it to pay the claims of some of its liquor vendors, a category that Kmart said is "vital" to its reorganization efforts. The comany said the court also gave it permission to pay outside counsel and trash haulers.t component of the debtors' inventory mix."At the same

TROY, Mich. -- Kmart Corp. here said last week a U.S. Bankruptcy Court in Chicago has granted the company an emergency order allowing it to pay the claims of some of its liquor vendors, a category that Kmart said is "vital" to its reorganization efforts. The comany said the court also gave it permission to pay outside counsel and trash haulers.

t component of the debtors' inventory mix."

At the same time it was seeking court approval to make the payments, Kmart said it was reserving its right to negotiate new terms with any liquor vendor as a condition of payment.

About 100 liquor vendors have been in contact with Kmart, which hadn't made payment to them for amounts owed since Kmart's Chapter 11 petition was filed on Jan. 22.

Other key vendors have filed objections with the Chicago bankruptcy court asking that it not grant final approval of procedures involving reclamation claims for goods shipped but not paid for.

PepsiAmericas, Minneapolis; the Pepsi Bottling Group, Somers, N.Y.; and Frito-Lay, Plano, Texas, have reclamation demands exceeding $6 million. The current procedures, which still require final court approval, allow for payment after confirmation of a plan of reorganization, or earlier at Kmart's discretion. Pepsi said that the current "payment timetable proposed by the debtors is camouflage for what amounts to a 15-month, interest-free unsecured loan."

Court papers said Kmart is taking a year to pay claims, with payments in 25% increments over four quarters.