Krispy Kreme Doughnuts Inc. took a big step closer to chapter 11 today as it announced that its chairman and chief executive, Scott A. Livengood, retired and that turnaround expert and current Enron CEO, Stephen F. Cooper, was named CEO and a director.
Steven G. Panagos — who works with Mr. Cooper at his consulting firm, Kroll Zolfo Cooper LLC — was also named president and chief operating officer of Krispy Kreme.
Somewhat surprisingly, the news sent Krispy Kreme’s shares soaring in mid-morning trading today. Expect that speculation to reverse itself as the reality of the situation becomes clearer over the next several days.
Krispy Kreme has been hammered over the past year by a gradual slowdown in sales and multiple investigations of its accounting practices and franchisee acquisitions. Here are the prior posts on the trendy doughnut maker’s demise.
Mr. Cooper and his firm are well-known in bankruptcy and corporate reorganization circles, as evidenced by the firm’s involvement in the high profile Enron chapter 11 case. Mr. Cooper and his firm will likely recover more than $100 million once their work is completed in the Enron reorganization.