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Judge Rejects Shopko’s Bankruptcy Plan

Store Chain Filed For Bankruptcy In January.

ShopKo store
Nicholas Eckhart (CC BY-NC-SA 2.0)

A federal judge has rejected Shopko’s bankruptcy plan.

U.S. Bankruptcy Court Judge Thomas Saladino applauded the efforts of Shopko officials, creditors, attorneys and consultants to bring the matter to a close. But Saladino refused to approve the plan this week because it would have barred creditors from pursuing legal claims against Shopko.

Press-Gazette Media reports one major creditor, McKesson Corp., told the judge that it has a civil claim of fraud against at least four Shopko executives. McKesson was the primary supplier of prescription medications to Shopko and was owed almost $70 million when Shopko filed for bankruptcy in January.

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McKesson claims Shopko executives made false promises in order to keep Shopko pharmacies supplied with medications for as long as possible, even though it wasn’t paying the supplier.