Krispy Kreme announced today that its wholly owned subsidiary in the Philadelphia area filed for Chapter 11 bankruptcy. Sales of Krispy Kreme's stock were halted this morning so that the company could prepare press releases explaining the bankruptcy filing. The company's stock, which traded for $105 in November 2000, closed at $4.60 today. The subsidiary, Freedom Rings LLC, operates six Krispy Kreme franchises in Philadelphia, Delaware and southern New Jersey, which the company explains is a very small number of its operating stores. According to Forbes, a significant portion of the subsidiary's debt is owed to Krispy Kreme itself. Freedom Rings' Chapter 11 petition claims a debt of less than $50 million, of which approximately $24 million is owed to Krispy Kreme.
Posted by franchiselawblog at October 17, 2005 06:02 PM