TROY, MICHIGAN - A bankruptcy court on Saturday issued a temporary restraining order requiring Penske Auto Centers to continue operating service centers at Kmart Corp. locations in 44 states, the discount retailer said. <br>
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The order was issued the same day Penske Auto Centers LLC had planned to close 563 centers at Kmart locations. <br>
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U.S. Bankruptcy Judge Susan Pierson Sonderby's order prohibits Penske from taking any action to close or liquidate the centers. <br>
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Kmart, which has been in discussions with Penske about the future of the centers, said Penske told it of its closing plans Friday. <br>
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``Kmart regrets the precipitous action taken earlier today by Penske,'' the discount retailer said in a statement. <br>
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But in a statement released Saturday evening, Penske Auto Centers Chairman Richard J. Peters said that in a meeting last month, Kmart president Julian Day said that ``Kmart had determined through their research that the auto centers provided no value to its core business.'' <br>
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Peters also said that on April 1, Kmart defaulted on a $5 million payment. The two will appear in bankruptcy court in Chicago on Monday. <br>
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Penske Corp., founded by former race car driver Roger Penske, purchased the centers from Kmart in 1995. <br>
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``Our team is focused on assuring an orderly transition for all of our constituents, including customers and employees,'' Penske Auto Centers president and chief executive Jim Wheat said in a statement. <br>
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The statement did not include a reason the company planned to close the centers and made no mention of the number of employees that would be affected. It said the company would try to hire former Penske Auto Centers employees at other Penske businesses. <br>
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Troy-based Kmart filed for Chapter 11 bankruptcy protection on Jan. 22 following lower-than-expected holiday sales and a dive in its stock price. Last month, it announced it will close more than 280 stores, eliminating 22,000 jobs.
