|
Krispy Kreme ERISA Litigation
Settlement Update: Settlement Approved
We are pleased to announce that on January 10,
2007, the Honorable William L. Osteen approved the Final Settlement of
this matter. Once the appeals period has expired and the Settlement
becomes final, Class Counsel will direct the Plans’ Trustee to begin
calculating each Class Member’s portion of the Settlement and commence
distribution of Settlement Funds pursuant to the approved Plan of
Allocation. As always, please continue to visit this website for
updates about the Settlement and allocation of Settlement Funds.
On January 10, 2007 the following Orders were
approved:
Order and Final Judgment
Order Granting
Plaintiffs’ Motion for an Award of Attorneys’ Fees, Reimbursement of
Litigation Costs and Expenses and for Case Contribution Awards for
Named Plaintiffs;
and
Order Approving
Plan of Allocation
Settlement Update: Fairness Hearing
Rescheduled
Pursuant to the Court’s order dated November 16,
2006, the Fairness Hearing has been rescheduled for January 10, 2007 at
2:00 p.m. For details regarding the Settlement, and the legal rights
and options for class members in relation to the Settlement, please
refer to the Case Documents or the Settlement FAQ below.
Settlement Update: Fairness Hearing
On January 10, 2007, the Court will hold a
fairness hearing, at which time it will determine whether to give the
settlement final approval. Plaintiffs have submitted the following
orders for consideration at the Fairness Hearing:
[Proposed] Order
and Final Judgment;
[Proposed] Order Granting Plaintiffs’ Motion for an Award of Attorneys’
Fees, Reimbursement of Litigation Costs and Expenses and for Case
Contribution Awards for Named Plaintiffs;
and
[Proposed] Order
Approving Plan of Allocation
For additional briefing pertaining to these
Orders, please refer to the Case Documents.
Settlement
On September 27, 2006, United States District
Judge William L. Osteen granted preliminary approval of the proposed
settlement in the Smith v. Krispy Kreme Doughnut Corporation
ERISA Litigation, a class action case in which plaintiffs allege that
the fiduciaries responsible for two Krispy Kreme ERISA plans made
imprudent decisions leading to significant losses to the plans and
their participants. Under the proposed settlement, the defendants deny
liability but agree to pay $4.75 million in cash and to make
significant improvements to Krispy Kreme’s ERISA plans. On January 10,
2007, the Court will hold a fairness hearing, at which time it will
determine whether to give the settlement final approval. For details
regarding the Preliminary Settlement Approval Order and the legal
rights and options for class members in relation to the settlement,
please refer to the Case Documents.
Court-approved Class Notice was mailed to Class
Members on September 29, 2006:
Class
Notice
Settlement FAQ
Q: Are there any deadlines I need to be
aware of?
A: Yes. If you are a class
member and want to comment on any aspect of the proposed settlement,
including the amount of money to be paid to the class, the changes in
Krispy Kreme’s ERISA plans, the amount of money to be paid to the
attorneys for the class as fees or reimbursed expenses, the amount of
money to be paid to the class representatives, or the proposed plan of
allocation, you must file your comments no later than December
18, 2006. Any such comments must be filed with the Clerk of
Court and sent to Counsel for Plaintiffs and Counsel for Defendants on
or before the due date. The Class Notice gives specific instructions,
which must be followed. A Final Fairness Hearing will be held on January
10, 2007. You may attend this hearing if you wish. The Class
Notice gives additional instructions and information concerning the
Hearing.
Q: How do I know if I am part of the
settlement?
A: The proceeds of this
Settlement will be allocated only to Class Members, and then only
according to a Court-Approved Plan of Allocation. You are a Class
Member if you fall within the “Settlement Class” approved by United
States District Judge William L. Osteen:
All persons who were participants in or
beneficiaries of either the Krispy Kreme Doughnut Corporation
Retirement Savings Plan or the Krispy Kreme Profit Sharing Stock
Ownership Plan at any time between January 1, 2003 and May 15, 2006 and
whose accounts in either of the Plans included investments in Krispy
Kreme common stock. The Defendants are excluded from the Class.
Q: How much will my payment be?
A: Plaintiffs will submit a
detailed Plan of Allocation to the Court for approval prior to the
Fairness Hearing. The Plan of Allocation, which, after filing, may be
obtained at www.kellersettlements.com
or by contacting Class Counsel, will describe the manner by which the
Settlement proceeds paid into the Plans (the “Net Proceeds”) will be
distributed to Class Members. In general terms, the Net Proceeds will
be allocated to Class Members in proportion to his or her interest in
Company stock in the Plans. Because the Net Proceeds are less than the
total losses alleged to be suffered in the Action, each Class Member’s
proportionate recovery will be less than his or her alleged loss. If
your proportionate recovery is de minimis (less
than $50), it may be forfeited to the Plans or distributed pro
rata to other Class Members. You are not responsible for
calculating the amount you may be entitled to receive under the
Settlement. This calculation will be done as part of the implementation
of the Settlement, and will be based on reasonably available Plan data.
Q. When would I get my payment?
A: Payment is conditioned on
several matters, including the Court’s approval of the Settlement and
such approval becoming final and no longer subject to any appeals to
any court. Upon satisfaction of various conditions, the net Settlement
Fund will be paid to the Plan and allocated to the accounts of members
of the Settlement Class pursuant to the Plan of Allocation as soon as
possible after final approval has been obtained for the Settlement
(which includes exhaustion of any appeals). An appeal of the final
approval could take several years. Any accrued interest on the
Settlement Fund will be included in the amount paid to the Plan and
allocated to the Plan accounts of members of the Settlement Class. The
Settlement Agreement may be terminated on several grounds, including if
the Court does not approve or modifies the Settlement.
For inquiries on
the settlement or to update your address, please e-mail:
investor@kellerrohrback.com
Case Information
The Smith v. Krispy Kreme Doughnut
Corporation ERISA Complaint was filed in the United States
District Court for the Middle District of North Carolina on behalf of
Plaintiffs and a class (the "Class") of all persons who were
participants in or beneficiaries of the Krispy Kreme Doughnut
Corporation Retirement Savings Plan and the Krispy Kreme Profit Sharing
Stock Ownership (the “Plans”) between January 1, 2003 and May 15, 2006
and whose accounts in either of the Plans included investments in
Krispy Kreme common stock.
The Complaint alleges that during the Class
Period, the Defendants breached their fiduciary duties to Plaintiffs
and the Class members by:
- failing to prudently and loyally manage the
Plans' assets;
- failing to provide participants with complete
and accurate information regarding Krispy Kreme stock sufficient to
advise participants of the true risks of investing their retirement
savings;
- failing to properly monitor the performance of
their fiduciary appointees, and remove and replace those whose
performance was inadequate; and,
- violation of co-fiduciary duties.
Please refer to the Amended Complaint or
Contact
Us for more information.
|
