Severance payments have been suspended and loans to 70 top senior Kmart executives, made before the company's bankruptcy, will not be written off. The loans totaled $30.1 million, of which $18 million went to nine top executives that have since left the company.

Creditors questioned the millions of dollars paid in bonuses and severance pay. Former CEO and Chairman Chuck Conaway, who has received much of the blame for the retail company's problems, received a $4 million severance package when he left in March.

Kmart said last week it was delaying the release of its annual report because it may have to restate its 2001 financials. New management will utilize the delay to review accounting including the questions of "vendor allowances and rebates and general liability reserves."

The Securities and Exchange Commission began investigating Kmart's accounting practices in January after an anonymous letter, purportedly by employees, raised questions about the company's accounting practices.

In March Kmart announced it was closing 283 stores and slashing 22,000 jobs.

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