June 21, 2005
Krispy Kreme Axes Six Officers in Accounting Investigation
The board of directors of Krispy Kreme Doughnuts Inc. announced that a special committee recommended the termination of six senior corporate officers as part of its continuing internal investigation of accounting problems that have delayed the company's release of financial statements since last year (see earlier post here). According to a company press release (here), the special committee recommended to the board on June 15 that the officers be terminated, although the company delayed until now making that disclosure, and there have not been any securities filings by Krispy Kreme since the June 13 disclosure that it was once again unable to file its quarterly financial statements. According to the press release: "[T]he Special Committee had concluded that six of the Company's officers should be discharged. These six officers include four senior vice presidents and were in the areas of operations, finance, business development, and manufacturing and distribution. Five of these individuals have resigned, and one has retired. The Company intends, for the time being, to fill these positions with existing personnel." None of the individuals have been identified by name yet.
Krispy Kreme is the subject of ongoing investigations by the U.S. Attorney's Office for the Southern District of New York and the SEC related to its accounting for certain franchisee payments, among other issues. Things are only getting stickier for the company, and quite possibly for the terminated officers. (ph)
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