Seeking to restore investor confidence, Krispy Kreme, the fast-growing but troubled doughnut-shop chain, made a leadership change Tuesday, replacing Scott Livengood as chief executive with corporate turnaround specialist Stephen Cooper. The latter's résumé includes the restructuring of bankrupt Enron Corp. While the move triggered a 10 percent jump in Krispy Kreme's stock price, analysts cautioned that the spike might not lead to a long-term rebound. "The balance sheet is a huge, huge mess," one analyst told CBS MarketWatch. Krispy Kreme's problems have been brought on because of overexpansion, the no-carb diet fad, delayed financial reports, and a Securities and Exchange Commission investigation.
For the second time in nine months, Mitsubishi Motors plans to ask its sister companies and other lenders for a multibillion-dollar bailout, Bloomberg.com reported. Citing unidentified executives close to the matter, it said Japan's fifth-largest - and only unprofitable - automaker needs more money to pay down debt and to develop new models for the domestic market. The Tokyo business journal Nihon Keizai said it had learned that plans call for three other companies in the giant Mitsubishi Corp. stable to advance half of the $4.9 billion the carmaker wants, with the rest to be sought from the state-owned Development Bank of Japan and other sources. Mitsubishi Motors was bailed out to the tune of $4.86 billion last May by these and other investors. Still, the value of its shares has dropped 35 percent since then.
Mellon Financial Corp., a leading provider of financial services for institutions, corporations, and wealthy investors, said Tuesday it is acquiring hedge fund administrator DPM of Somerset, N.J. Terms weren't disclosed, but DPM manages $30 billion in assets. Mellon Financial is based in Pittsburgh.
United Airlines and its pilots union reached tentative agreement on a revised new contract Tuesday, and voting by the membership was to begin immediately. Neither side divulged details, although the nation's No. 2 carrier said they involved comparable savings to those in a deal that was rejected by a federal bankruptcy court 12 days ago. That agreement called for a 15 percent pay cut and would have allowed United to void the pilots' pension plan in exchange for other considerations. The court said that would unfairly force other unionized employees to join the pilots in surrendering their pensions. Now more than two years into bankruptcy, United says it still needs to save $725 million annually to complete its restructuring.