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Krispy Kreme Forces Out Six Executives

June 22, 2005|From Bloomberg News

Krispy Kreme Doughnuts Inc. on Tuesday ousted six executives in its biggest housecleaning since federal probes of its accounting began.

The six, whose names weren't disclosed, are in finance, manufacturing and distribution, operations and business development. They include four senior vice presidents. A board committee, which recommended their dismissal, is cooperating with the Securities and Exchange Commission and federal prosecutors, Winston-Salem, N.C.-based Krispy Kreme said.

The SEC is looking into how Krispy Kreme accounted for the repurchase of franchises and lowered profit forecasts last year. The departures are the first stemming from the investigations since Krispy Kreme ousted Chief Executive Scott Livengood in January and said it would restate last year's earnings.

The company said five executives resigned and one retired. It will fill their posts with existing personnel "for the time being." Krispy Kreme would not comment beyond the release.

The U.S. attorney's office for the Southern District of New York is investigating Krispy Kreme, whose shares surged after an initial public offering in April 2000 as rapid expansion fueled sales. The stock has dropped 84% from its August 2003 peak. The shares fell 1 cent Tuesday to $7.66.

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