October 27, 2005
Krispy Kreme Seeks Dismissal of Shareholder Lawsuit
As its stock drops to $4.50 a share, Krispy Kreme and its executive officers moved to dismiss the class-action lawsuit filed against them by Krispy Kreme shareholders last year in federal court in North Carolina. The lawsuit alleges that the company and its top executives issued false and misleading statements about revenue and earnings forecasts and that the company improperly recorded revenue and violated accounting procedures. According to one news source, Krispy Kreme argued in its motion to dismiss that predictions of future financial performance did not constitute a sufficient basis for a securities fraud claim and that plaintiffs failed to show any fraudulent intent behind the company's accounting errors. Krispy Kreme also claims that its warnings to investors that potential business risks could alter the company's performance shielded it from legal liability.
Posted by franchiselawblog at October 27, 2005 01:37 PM