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Krispy Kreme Replaces CEO

WINSTON-SALEM, NC-Krispy Kreme's CEO Scott Livengood, at the helm since 1998, is being shown the door by the troubled doughnut maker.

By Dees Stribling | Updated on January 18, 2005

WINSTON-SALEM, NC-In the wake of diminished stock prices and an SEC investigation into its accounting practices, plus looming shareholder lawsuits, doughnut chain Krispy Kreme has ousted chairman, president and CEO Scott A. Livengood and named Stephen F. Cooper, chairman of financial consulting group Kroll Zolfo Cooper (KZF) LLC, as interim CEO, and Steven G. Panagos, also of KZF, as president and COO. Vice chairman of the board of directors James H. Morgan has become chairman.

Once the darling of Wall Street, at the time of its 2000 IPO–which Livengood oversaw–Krispy Kreme had a bad 2004, with sales taking a beating in the wake of the low-carb craze, and then by being obliged to restate its 2004 financial reports due to errors in how it accounted for repurchases of franchises. To cap things off, for the eight weeks ended Dec. 26, average weekly sales per store decreased for the doughnut maker about 18% (25%, for company-owned stores), compared to the corresponding weeks of 2003.

KZC is a well-known corporate restructuring specialist. Most famously, Cooper currently acts as interim CEO, president and chief restructuring officer of Enron; before that, he was vice chairman of Laidlaw. Panagos is the national practice leader of KZC’s Domestic Corporate Advisory and Restructuring Group and formerly was interim CEO at the Penn Traffic Co., where he’s currently chief restructuring officer.

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