(Reuters) – Starbucks Corp on Wednesday said breaking up with Kraft was hard to do, but worth the high price, after an arbitrator ruled it must pay a whopping $2.76 billion for ending the companies’ grocery coffee partnership early.
http://ca.news.yahoo.com/starbucks-restate-results-show-loss-kraft-damages-121242696–sector.html
Restated results for Starbucks’ fourth quarter ended on September 29 shows a net loss of $1.64 per share. Also, an arbitrator ruled on Tuesday that Starbucks must pay $2.23 billion in damages plus $527 million for interest and legal fees for terminating its retail packaged coffee sales, marketing and distribution agreement with Kraft at least three years early.
What makes the issue worse, the company will issue $750 million in new debt in the next three months, Chief Financial Officer Troy Alstead said on the analyst call.
I do believe that it is not only an accounting failure, we can clearly find the problem of a lack of supervising in this case. The past experience of the failure on partnership with Kraft also proved this. The management and the supervisor system should be established or improved.