It seems to me that Silver Point could only have risked the $225 million with the primary end-game objective of grabbing all Krispy equity out of Chapter 11 and selling it at a calculated higher value, and that that value was critically dependent on the assumption of continued pure-profit royalty/advertising payments from the franchisees as projected by Cooper. Now that such payments are being withheld and it is questionable that they can ever make economic sense, the perceived value of Krispy Kreme has likely dropped below Silver�s entry point, perhaps below a level which might justify DIP financing. Ouch, Chapter 7 and a disaster for Silver Point, poor babies. Not necessarily probable, but increasingly possible.
Under the circumstances with �success� not defined and no compelling need to reach agreement, the Krispy Board might well offer nothing to Cooper in the way of an incentive fee or perhaps throw them a bone with �success� defined as anything more than liquidation. Silver for its part well might pull the plug to cut its losses.
Total PROJECTED RETAIL sales decline from 2002 - 2005 = 44%.
In other words, RETAIL sales in 2005 are expected to be slightly more than half what they were in 2002.
Looks like Livengood's graph was accurate; maybe the franchisees should have taken a look at it.
kkd found out that st was having problems when kkd a/r notified kkd management on July 15 that st's bank account was blocked or insufficient. Apparently, the account had been in that state since June 26, but kkd a/r had failed to notify management (maybe pooper scooper fired one too many folks).
My guess is that the magical June 30th date (bank loan payment due date) forced many of the franchisees' hands.
Notice also that our man Murphy threatened st in April 2003 re the development schedule as did Tate in August 2003 (apparently after he figured out the Lincoln Ave store would not be built - remember the bridge?).
The Peoria store was started late last year. Construction stopped during winter even thohugh we had a very mild winter and a lot of builders continued to work. In a local paper, ST said the work was sropped due to weather and would resume in the spring. Nothing has happened. This store has a foundation slab and piping and that's it. I doubt it will be completed.