Kmart Corporation (Wilmington Trust)

May 6, 2003

      Compass Advisers, LLP ("Compass") provided financial advisory services to Wilmington Trust Corporation ("Wilmington Trust"), Indenture Trustee for a series of notes and debentures issued by Kmart Corporation ("Kmart"), then a Chapter 11 debtor-in-possession.  When proceedings began on January 22, 2002, Kmart was the third-largest discount retailer in the United States, and its filing the largest retail bankruptcy in United States history.  Wilmington Trust required financial advisors toward the end of the bankruptcy proceedings to protect the interests of the bondholders and to help renegotiate bondholder recoveries as set forth pursuant to a Section 363 sale of Kmart to ESL Investments ("ESL").  Compass was retained as of December 12, 2002.

      Compass reviewed competing valuations and analyzed proposed creditor recoveries specified by the proceeds of the sale, taking into consideration Kmart's future cash requirements, step-downs in recoveries and the value of the sale transaction.  Compass acted as advocate for the debentures and was an active participant throughout the negotiation process, including a final all-hands session with Compass' Phillip Siegel, Eddie Lampert (CEO of ESL Investments), and senior and junior creditors' representatives, during which the recoveries to the Wilmington Trust debentures were substantially increased.  Additional value was provided by a combination of ESL's recognition of lower cash requirements subsequent to closing, plus a modification of the allocation of recoveries to junior creditors.

      Based on Compass' analyses and negotiations, the value of the estate was substantially improved, and the bondholders represented by Compass were made primary beneficiary of the increased recovery.  Kmart emerged from Chapter 11 on May 6, 2003.