Footstar shareholder seeks answers after company discontinues operations

By Lisa Kerner

Charlotte, N.C., Feb. 2 - Footstar, Inc. shareholder Outpoint Capital urged the company to disclose specific information now that its operations have ended as of Dec. 31 and following receipt of a "substantial portion" of the payment due from Kmart Corp.

Outpoint wants the Footstar board of directors to disclose, among other things, preliminary December quarter results, the current cash balance as of Feb. 1, the status of inventory payments and the status of the planned sale of Footstar's headquarters building.

In a Feb. 2 letter, Outpoint managing member Jordan Grayson asked the board of the Mahwah, N.J., discount footwear company not to take action that may "limit the flexibility of shareholders to adequately protect the value of their ownership" in Footstar including lowering the ownership threshold trigger under the shareholder rights plan below 15%.

As previously reported, Footstar sold its brands to Kmart in April 2008 for $13 million.

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