CHICAGO, July 2, 2004 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that it has sued Krispy Kreme Doughnuts, Inc., and certain of its officers and directors, in the United States District Court for the Middle District of North Carolina. The shareholder lawsuit is on behalf of all persons and entities who purchased the securities of Krispy Kreme Doughnuts, Inc. ("Krispy Kreme" or the "Company") between August 21, 2003 and May 7, 2004, inclusive ("Class Period").
The Complaint alleges that Krispy Kreme, along with certain of its officers and directors, violated the federal securities laws by issuing a series of materially false and misleading statements to the market. These misstatements have had the effect of artificially inflating the market price of Krispy Kreme's securities.
If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Conor R. Crowley at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to Krispy Kreme.
Specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company used aggressive bookkeeping to boast its earnings when it acquired its Michigan franchise in 2003; (2) that Krispy Kreme's core businesses were actually underperforming; (3) that the Company expanded too quickly, and would now be forced to shut down six factory stores and three Doughnut and Coffee shops in an effort to improve productivity; (4) that the Company's future strategic development plans with respect to Montana Mills were flawed, as the Company now plans to divest the Montana Mills operations in order to focus on its core business; (5) that the Company would face stiff competition from Dunkin' Donuts, which sells high-quality coffee and a more diverse line of breakfast foods than Krispy Kreme; and (6) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections.
On May 7, 2004, Krispy Kreme announced that it expects fiscal 2005 diluted earnings per share from continuing operations, excluding certain charges, to be 10% lower than previously announced guidance. As a result of this disclosure, shares of Krispy Kreme fell $9.29 per share, or 29.21%, from the previous day's closing price to close at $22.51 per share.
If you purchased Krispy Kreme securities during the Class Period and if you meet certain other legal requirements, you may file a motion in the Court where the lawsuit has been filed to serve as a lead plaintiff. You must file your motion no later than July 12, 2004.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.