Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Kroll Zolfo Cooper Inc. said Monday, Aug. 1, it could pocket as many as 1.2 million shares of Krispy Kreme Doughnuts Inc. for its restructuring work at the scandal-ridden doughnut chain. The “success fee” comes in addition to the regular hourly wages earned by KZC executives now heading the Winston-Salem, N.C.-based company. KZC chairman Stephen Cooper takes home $760 per hour for his work as Krispy Kreme chief executive while a top lieutenant, Steven Panagos, earns $695 per hour as the company’s president and chief operating officer. According to terms, KZC will be issued a warrant, entitling the New York-based restructuring firm to purchase 1.2 million Krispy Kreme shares at $7.75 per share. KZC can exercise the warrant on Jan. 29, 2006, or 30 days after Krispy Kreme replaces Cooper as CEO, whichever comes later. On Monday afternoon, Krispy Kreme stock added 30 cents to $7.51. After going public in 2000, Krispy Kreme shares soared above $40, spurred on by the company’s rapid expansion and homespun marketing that gave the chain a cult-like status. The stock crashed amid charges that much of Krispy Kreme’s growth was due to fraudulent accounting. The company faces an SEC investigation as well as shareholder lawsuits for allegedly inflating sales figures and misrepresenting the earnings outlook. In mid-January, Krispy Kreme fired longtime CEO Scott Livengood, who oversaw the company’s expansion from the southern U.S. to the rest of the country and into Canada, Britain and even Australia. A seasoned restructuring executive, Cooper replaced Livengood and took steps to stem the losses at Krispy Kreme. Cooper has served as Enron Corp.’s CEO since early 2002, selling off billions of dollars in assets from the second-largest bankruptcy in U.S. history. Just three weeks after taking over Krispy Kreme, Cooper dismissed one-quarter of the company’s work force and sold the company’s jet. Last month, six unidentified executives from across the company’s ranks left. The moves have bought Krispy Kreme more time with the banks that have loaned it around $90 million, even though it has warned that its financial statements from the past three years are unreliable. The company hasn’t filed a quarterly report with the SEC since last September. The “success fee” that KZC stands to gain from Krispy Kreme is nowhere near as extravagant as its financial rewards for its work with Enron Corp. Altogether, KZC was paid $63.4 million for its two-and-a-half years of work on Enron. A bankruptcy judge is still considering the turnaround firm’s request for an additional $25 million “success fee.” Copyright �2005 TDD, LLC. All rights reserved.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.