NEW YORK, June 15, 2004 (PRIMEZONE) -- Wechsler Harwood LLP filed a class action lawsuit in the United States District Court for the Middle District of North Carolina, on behalf of all persons who purchased the securities of Krispy Kreme Doughnuts, Inc. ("Krispy Kreme" or the "Company") (NYSE:KKD) between August 21, 2003 and May 7, 2004, inclusive, (the "Class Period") against defendants Krispy Kreme and certain officers of the Company. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wechsler Harwood LLP website at www.whesq.com.
The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities.
Specifically, the complaint alleges that the statements made by the defendants during the class period were materially false and misleading because they failed to disclose and misrepresented the following adverse facts: (a) Krispy Kreme's core businesses, despite the Company's record growth, was underperforming because the Company's wholesale business was costly to operate and was also undermining the Company's retail operations by offering inferior doughnuts under the Krispy Kreme brand name; (b) Krispy Kreme had expanded too quickly and recklessly in an effort to sustain the facade of significant growth momentum, and consequently, would incur significant costs as it would be forced to shut down factory stores and shops in an effort to improve productivity; (c) the Company's business growth strategy with respect to Montana Mills was fatally flawed, was failing to meet expectations and creating financial strains on the Company, thereby inevitably forcing the Company to divest Montana Mills at a loss in order to maintain earnings or continue to suffer from the financial strain created by Montana Mills; (d) Krispy Kreme was experiencing diminishing margins as a result of the popularity of low-carbohydrate diets such as the Atkins and South Beach diets; and (e) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections.
If you are a member of the class described above, you may, not later than July 12, 2004 move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Wechsler Harwood has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Virgilio Soler, Jr., Wechsler Harwood Shareholder Relations Department: vsoler@whesq.com extension 283.