Kmart Sues For Property Tax Relief

Apr 01, 2004
George Anderson

By George Anderson

Kmart has filed suit against nearly 500 local governments contesting $8.6 million in property taxes it says it was overcharged by the communities.

The lawsuit filed by the retailer claims, “The allocation formula adopted by the defendants in arriving at the assessments is arbitrary, imprecise and unreasonable and constitutes no proper basis for the valuation of the . . . property.”

According to press reports, Kmart has reached a settlement with a number of the communities while others intend to fight.

Martin Zohn, a Los Angeles bankruptcy specialist with the law firm Proskauer Rose, told the Associated Press he sees little point to Kmart’s action.

“The disputing of these tax claims under these circumstances is just a continuation of the misguided management that put Kmart in bankruptcy to begin with,” he said. “No matter what anyone says, this is going to require management time and energy, and it’s going to cost a lot of money.”

Moderator’s Comment: What are your thoughts on Kmart’s decision to file suit against the communities for overcharging
it on property taxes?

First, let us state publicly, we have come to hate having to write anything negative about Kmart.

Martin Zohn, however, is right on the money. This lawsuit amounts to little more than Kmart “sticking a finger in the eye” of the communities it is suing.

In many cases, these communities are in Kmart’s home state of Michigan. For example, the retailer is looking to get back $627,064 from Detroit.
Anderson – Moderator

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