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  • Cops From Across US In Mourning

    "They may have to go up on us, one teary-eyed highway patrolman sobbed."

    Entrepreneurs Get $7.9 Million Judgement Against Krispy Kreme

    POSTED: 3:57 p.m. EST February 10, 2003

    CHARLOTTE, N.C. -- An arbitration panel awarded $7.9 million to two would-be California franchisees who sued Krispy Kreme Doughnuts Inc., the company said Monday.

    Kevin Boylan and Bruce Newberg accused Krispy Kreme of breach of contract, intentional interference with contract and business relations and other claims after the company awarded development rights for northern California to another group, Golden Gate Doughnuts LLC, according to SEC filings.

    That group is 67 percent owned by Krispy Kreme. Company Chief Executive Scott Livengood was originally a partner but sold his remaining interest in the development group last year as Krispy Kreme made changes to avoid conflicts of interest. Livengood had been dismissed as a defendant in the lawsuit.

    Newberg and Boylan filed suit in Superior Court for Los Angeles County in March 2000, according to filings with the Securities and Exchange Commission. The case was later transferred to arbitration by the American Arbitration Association.

    Krispy Kreme had claimed that it had been in discussions with the plaintiffs regarding their participation in the northern California franchise, but differences regarding the terms and conditions of their participation were never resolved. Krispy Kreme claimed no oral agreement was ever reached and no written agreement was executed, according to SEC filings.

    Krispy Kreme said it is reviewing its options following the award, including further legal options, but Chief Operating Officer John Tate played down that route. "It's just way too early to ascribe any outcome" to the company's review of the decision, he said.

    Tate said the ruling will result in a one-time, after-tax charge against earnings of about 8 cents a share for the just-ended fiscal fourth quarter.

    "It's a one-time event and it doesn't, in a material way, affect our financial position or any of our prospects," Tate said in an interview Monday with Dow Jones Newswires.

    Krispy Kreme, which is based in Winston-Salem, expects to release an update on fourth-quarter sales by week's end and will release earnings on March 18, Tate said.

    BB&T Capital Markets analyst Andrew Wolf said he doesn't consider the news to be very negative.

    "It's a one-time charge and there are not any other pending lawsuits like this," said Wolf, who rates Krispy Kreme shares at "buy." Wolf doesn't own any shares, but the company is a BB&T investment banking client.

    Shares of Krispy Kreme were at $27.54 in late trading Monday on the New York Stock Exchange, down 57 cents, or 2 percent, on heavy volume. The day's weakest level of $26.42, at that point, was a 52-week low, surpassing the previous low of $27.40 set Oct. 10.
    People have more fun than anybody.

  • #2
    Ya know, you get something so pure and simple like dough fried in animal fat, and some money grubbin' bottom feeder has to exploit it for their own gain and ruin it for everyone.

    On a similar note...

    Anyone have the Dunikin' Donuts/Baskin Robbins combo stores? If so, have any of them shut down? We've had several area ones close up without warning. From what I heard it was because corporate wanted those stores to also make subs, too (I think Subway is in the same conglomerate).

    What a shame. I would go to the local one for a cup of coffee or a double scoop of German Chocolate Cake ice cream. Guess those days are gone until someone higher up can get it together.


    • #3
      Sgt. Dave, you had me worried until I got past the first few lines and realized it was about doughnuts.

      I'm probably in a minority, but I don't think Krispy Kreme is so great.


      • #4
        Snoopy I have to agree with you. I think they are way over-rated. Most, (if not all) of the casinos down in Laughlin feature Krispy Kreme donuts, but they obviously are made elsewhere and transported in. And they just are not very good.
        6P1 (retired)


        • #5
          I've never had one. but i did hear if you dont have one fresh from their oven that it's not the same.

          the best donuts i ever had were at the Delaware farmer's market and made by the PA Dutch.
          "You did what you knew how to do...and when you knew better, you did better." ~~Maya Angelou


          • #6
            Tulsa has a brand new one. You get them off the conveyor belt, so fresh, so nicely don you have to blow on it a minute to cool it down

            The only drawback that I can see, is it's surrounded by Okies

            Jim Burnes
            Not an Okie.


            • #7
              I ought to say that (for the record) I HATE doughnuts!!!!!!!

              I just posted this because of the stereotypes and the cliche involved!
              People have more fun than anybody.


              • #8
                Don, nice to see you back. I like your sense of humor so it's not the same when you just diappear in a puff of smoke.


                • #9
                  Thanks Snoopy. I just "took a little time off." Shoot, everybody should be entitled to that once in a while!
                  6P1 (retired)


                  • #10
                    I love Krispy Kreme Originals.....You have to get them fresh, or the glaze gets all gooey....KK stock has done very, very well for me.


                    • #11
                      You folks have obviously never been introduced to Tim Hortons.

                      Not only are their donuts bloody good, but the coffee, hmmmmmmmmmmmmmm.

                      I know there are plenty here who can back me up on this.

                      (wink-wink, nod-nod, RCMP)
                      Define Pilot:

                      "Someone who is too lazy to work and too stupid to steal"


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