Shareholders of Krispy Kreme Doughnuts, Inc. filed two lawsuits this week in the U.S. District Court for the Middle District of North Carolina against 17 of the company's current and former executives and board members for failure to adequately look out for the company and its shareholders. In one of the lawsuits, a Pennsylvania resident alleges that the executives and board members failed to disclose material information, failed to correct the company's publicly reported financial results, and did not fulfill their duty to ensure that the company's financial statements were prepared in accordance with generally accepted accounting principles. These new lawsuits are the latest of a series of lawsuits filed against Krispy Kreme by its shareholders. In May 2004, a class of Krispy Kreme shareholders filed suit in the same federal court claiming that the company's senior management disregarded signs that the company was expanding too quickly and that the company's wholesale business undermined sales at its retail stores.
Posted by franchiselawblog at June 6, 2005 11:53 AM