from Brian Louis wsjournal.com article:
"Our focus is the company's restructuring," Randall said. "We've jointly elected to extend the timeframe for finalizing a success fee given the numerous other priorities and deadlines involved with the restructuring. That's all there is to it."
You can tell from the quote that he asked something like, "Does the continual extensions imply that there is a financial impasse between Kroll and kkd?"
I think it's safe to say that the success fee will be significant and that Kroll will no doubt get it.
However, look closely at the Kroll quote:
What exactly are the "numerous other priorities and deadlines involved with the restructuring"?
I wasn't aware of any deadlines except for the Dec 15, 2005 restatement date (which can always be pushed back).
Is there an undisclosed deadline from Silver Point?
Is there an undisclosed deadline from the nyse?
Is there an undisclosed deadline from the sec?
Is there an undisclosed deadline from the doj?
Is there an undisclosed deadline from the auditor?
Is there an undisclosed deadline from the Audit Committee?
Is there an undisclosed deadline from the Special Committee?
Is there an undisclosed deadline from jv lenders (regarding kkd loan guarantees)?
Obviously, the Kroll spokesperson is not mistaken as Kroll doesn't make mistakes of this type; what then, might these deadlines relate to?
I look forward to attending a court hearing and look forward to picture of a few of these guys in handcuffs. I guess the corporate jet didn't carry Livengood and others to the UNC b-ball games this year to "look at ral estate locations".
Nice to read all of the formerkk's messages - it seems as though everyone shares the same sentiments regarding KK's former management. After Cooper and Panagos take the company through BK, it would be nice to get the whole crowd together when the cases go to court. Perhaps a public viewing at Noble's would be appropriate? At the same time, maybe an auction could be held to sell-off assets the group of six acquired during their glorious tenure at Kripsy Kreme - automobiles, beachhouses, jets, mansions, etc. Could make for an entertaining evening!
Of additional significance:
-- Robert Strickland as an early founder of Lowe's Home Improvement has very deep pockets and a reputation to defend. I have assumed he is Jimmy Strickland's father, but don't know that.
-- Robert S. McCoy, as you imply, was recently the lead miscreant in Wachovia's $500 million stock rigging scandal which the bank settled with the SEC for $37 million. He was chairman of Krispy's Audit Committee at the time it failed at year end FY 2004 to impair the $35+ million Montana Mills intangibles only to write off the whole nonsense just weeks later.
-- James Morgan, currently Krispy's Board Chairman, together with McCoy, are ex-senior officers of Wachovia and were in a position to provide the bank with inside information, in particular relative to the Silver assumption of the Wachovia Syndicate finanacing, which brings the bank into play again as a possible SEC target.
-- Su Hua Newton is an extraordinary woman in her own right. Just what she was doing on the Krispy Board is a puzzle, but she is likely pissed as a wet hen and particularly concerned about personal liability. She is connected with Luis Vuitton Moet Hennesey having with her husband sold the Newton Winery to that company.
You must think even less of these guys than I do. lol
Did the board even have the authority to let them resign? I thought the Special Committee had been handed that authority.
What is the difference between discharge and resignation; I know that the six might be somehow entitled to benefits that they wouldn't otherwise have gotten but does it make any difference from a legal perspective regarding kkk. Does it make the six more likely to cooperate? less likely?
Interesting to note that a very glorified retirement email was sent out within KKD in mid-May for one Fred Mitchell, who then I guess was "re-retired" by the SC in mid-June. Also, the Meadows position was filled last week (KKD needs a VP of equipment mfg??) by a former KKM&D VP that had resigned recently to pursue other opportunities (also noted via an overly-glorified email).
To take the argument one step further, the resignation/retirement of the disgraced corporate officers is evidence against the theory that appointment of the Special Committee was engineered by a faction of duped outside directors.
Were there such a faction, determined to pursue the investigation, its strength would be reinforced by the addition of the two Special Committee members to the Board. Why, then, fail to fully implement the Special Committee's recommendation that the six officers should be discharged?
Much more likely is that some or all of the Board was coerced into appointment of the Special Committee. Perhaps by the SEC. Perhaps by lawyers recommending means of protection against the SEC. Perhaps as a means of protecting the directors against personal liability in the stockholder suits.
>>> the duped outside directors Holt West Newton
Your scenario does not require the assumption that the outside directors were duped. In fact, it's hard to imagine that they didn't have some inkling of what was up.
Appointment of the Special Committee was probably suggested to the Board as a means of fending off the SEC and, potentially, prosecutors. The Board is seen exercising its fiduciary duty. For members of the Board whose only past shortcoming is a failure to exercise sufficient oversight, it would clearly be advantageous to take action as evidence of possible wrongdoing mounted. To the extent that a Board Member feared other matters that might be uncovered by the Special Committee, the balance would shift.
The dynamics of the Board continue to bear watching, as evidenced by the recent decision to allow officers to retire or resign after the Special Committee recommended their discharge.
Robert S. McCoy, Jr., former Wachovia Bank CFO who had his own ethical problems, was appointed to the board and made head of the Audit Committee to replace the mysteriously departed Bowles.
So, by the time it became obvious that shenanigans were involved, the duped outside directors
probably voted to bring in the Special Committee against the wishes of
supported the insurrection as they have been given leadership roles in the new company.
I'm guessing McCoy did not, given the Audit Committee's failure to find anything wrong.
I can't even fathom how the Conflicted One, McAleer, would have voted.
Here is the makeup of the board at the ipo:
Scott Livengood CEO, Chairman of the Board, President
John McAleer Executive VP of Concept Development, Vice Chairman of the Board
Frank Guthrie Franchisee
Joseph McAleer Franchisee
Robert L. McCoy Franchisee
Robert Simmons Franchisee
Steven Smith Franchisee
As you can see, there were only 2 indepedent board members, Lynch and Strickland.
The Audit Committee was composed of the following:
Frank Guthrie Franchisee
Robert Simmons Franchisee
Steven Smith Franchisee
Additionally, William Lynch, the Chairman of the Audit Committee and only independent director, was GIVEN - just prior to the ipo - options to buy 156,000 shares @ $1.295 (split adjusted). At $35 per share, that's about $5.26 million in capital gains. He also held another 80,000 shares outright (split-adjusted) which he somehow obtained prior to the ipo. That's another $2.8 million at $35 per share. With around $8 million in holdings, his "independence" can hardly be counted on in such circumstances.
Here is his bio. It's not all clear that he is qualified to head the audit committee:
William T. Lynch, Jr. has been a director since November
1998. He has served as President and Chief Executive
Officer of Liam Holdings LLC, a marketing and capital
management firm, since April 1997. Mr. Lynch retired as
President and Chief Executive Officer of Leo Burnett Co.
in March 1997 after serving with that advertising agency
for 31 years.
In the first proxy after the ipo, Simmons left the board; not long thereafter he was bought out.
Here is his description in the original S-1:
ROBERT J. SIMMONS has been a director since May 1989. Since 1970, he has also
been the President and majority owner of Simac, Inc., our Akron, Ohio
At the first annual meeting after the ipo, the board was expanded to 11 members (from 9) and Simmons was replaced:
The three new members were:
Mary Davis Holt
During fy02 the Audit Committee was reconfigured to be all "independent":
In early fy04, Casstevens announce he was quitting simultaneous to the resignation of numerous board members:
Two of the resigning board members were then bought out in Dallas:
So, after Scotty Did Dallas, the board looked like this:
Mary Davis Holt
Su Hua Newton
Erskine Bowles ended up quitting after a very short run without even a published resignation letter:
Robert S. McCoy, Jr., former Wachovia Bank CFO who had his own ethical problems, was appointed to the board and made head of the Audit Committee to replace the mysteriously departe