DWD: Settles Wage Claim With Fleming Companies, Inc.

Rose Lynch (608) 266-6753

Settlement includes cash and stock options in excess of $2.5 million

Madison – The Department of Workforce Development has reached agreement with Fleming Companies, Inc. to settle 650 wage claims for $2.5 million. The department has settled its wage claims against Fleming Companies, Inc., including affiliated companies previously doing business in Wisconsin.

“I am pleased that the department was able to reach an amicable agreement with Fleming so these hard-working former employees can receive the compensation that they are due,” Governor Doyle said. “Our workers are our greatest resource, and protection of their rights is one of our highest priorities.”

On April 1, 2003, Fleming filed a Chapter 11 petition on bankruptcy court. At least 16 of its facilities in Wisconsin were ultimately closed as a result of the bankruptcy filing. Former employees from 15 of Fleming’s facilities filed wage complaints with the department’s Equal Rights Division alleging that Fleming failed to comply with Wisconsin’s business closing law. The law generally requires 60 days advance written notice of a business closing or mass layoff. The employee complaints alleged that Fleming did not provide the required advance notice and that the employees were therefore due wages and benefits for each day that required notice was not provided.

Fleming contested liability under the law, but cooperated fully with the department’s investigation. The Department of Workforce Development determined that there were no violations of the law for seven of the closings, Wauwatosa, Pewaukee, Brown Deer, Greenfield (South 76th St.), Greenfield (South 27th St.), Menomonee Falls, and Racine. However, the department found violations at the other eight facilities, Antigo, Brookfield, Kenosha (Rainbow Foods), Waukesha, Marshfield, Superior, Kenosha (Food 4 Less), and Wausau. No complaints were filed for the La Crosse facility. The department determined that approximately 650 employees at the eight facilities were owed approximately $2.5 million in additional wages.

The settlement provides that the additional wages due former employees of seven of the eight facilities will be allowed as valid claims in the bankruptcy proceeding at 100%, and the Superior claims will be allowed at 75%. Former Wisconsin employees with allowed claims will also participate in an additional pool of $200,000, paid as further consideration by Fleming to satisfy the wage lien filed by the department.

The agreement plan calls for the payment of allowed claims for wages with cash and/or stock in a reorganized company, Core-Mark Newco. Employees with allowed claims will receive a letter from the Department of Workforce Development in the near future with information as to their individual allocation between cash and stock in the new company.

The settlement is conditioned upon Bankruptcy Court approval and confirmation of Fleming’s proposed plan. A confirmation hearing is presently scheduled for July 26, 2004. If both approvals occur, employees can expect payment, which will be made directly from the bankruptcy proceeding, within 30 to 60 days of confirmation. Prompt satisfaction of the allowed claims was a major factor in the department’s willingness to settle. Continued litigation of some or all of the claims could have held up payment for months, even years.

All former Wisconsin employees will receive a notice to approve the settlement in the near future. Any employee can object to the settlement, in accordance with provisions of the notice. Each employee with an allowed claim should receive a letter outlining the amounts he/she will be paid in cash and in stock before the approval notice is received, to allow employees to make an informed decision on whether to object. Any objections will be heard by the Bankruptcy Court at a later date. The department, however, believes the settlement is reasonable, and will be supporting it in court.