Doughnut maker and retailer Krispy Kreme Doughnuts has announced that an application has been filed with the Ontario Superior Court of Justice for a restructuring of KremeKo, Inc. under the Companies’ Creditors Arrangement Act.
Krispy Kreme Doughnut Corporation has a 40.6% interest in KremeKo, its area developer for central and eastern Canada.
In connection with this application, Krispy Kreme Doughnut Corporation, the franchisor, has agreed to provide debtor-in-possession financing to provide funds for KremeKo’s operations during the restructuring process. The court also approved the appointment of a chief restructuring officer to work closely with the Company and to manage KremeKo’s operations during the course of the restructuring.
“This is a difficult but necessary process for KremeKo, and we believe it is in the best interest of the Krispy Kreme brand in Canada in the long term,” said Steve Cooper, CEO of Krispy Kreme Doughnuts, Inc. “We believe that this process allows us to continue to serve customers in KremeKo’s markets while simultaneously restructuring our Canadian operations on a sound basis so that we can continue to grow.”