In a statement, the company which filed for Chapter 11 bankruptcy protection last week, said it had contacted chief financial watchdog the Securities & Exchange Commission after receiving the letter.
The SEC then authorised the company to undertake an independent investigation. Kmart’s board of directors appointed the law firm of Skadden, Arps, Slate Meagher & Flom, lead counsel to Kmart in its Chapter 11 filing as well as Deloittes.
The company said it would keep the watchdog informed of the progress of the inquiry, adding that it intended to ‘cooperate fully with the SEC’.
The collapse of Kmart was the biggest retail bankruptcy in US corporate history. The company hopes to restructure and re-emerge in 2003.