The judge presiding over ShopKo’s bankruptcy declined to confirm the retailer’s liquidation strategy, objecting to broad offers of legal immunity to insiders that included officers and directors, WSJ Pro Bankruptcy reported. Bankruptcy Judge Thomas Saladino said that it was his toughest call ever on the confirmation of a chapter 11 plan. The proposal developed during the bankruptcy was eventually supported by most major creditors except for drug supplier McKesson Corp., which took issue with grants of legal immunity that ShopKo wanted to grant to company insiders. Secured creditors, including Wells Fargo NA, would have recouped virtually everything they were owed under the proposal, though unsecured creditors were expected to receive at most pennies on the dollar. ShopKo has closed most of the roughly 370 general-merchandise stores it brought with it into chapter 11, while most of its 14,000 employees lost their jobs.
