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Can A Possible Reg. FD Violation Turn Into An 8-K Breach?

Taub Stephen | February 23, 2003

Can a possible Reg FD violation turn into an 8-K breach?

This is one of the questions surrounding AFC Enterprises, the fast food company that operates Cinnabon, Popeye’s and Church's fried chicken.

Last week, AFC filed its long-awaited 10-K for 2002, restating previously-reported earnings by $27.4 million over a three-year period due to what it called "accounting errors."

The food franchiser said the restatement boosted earnings for the first three quarters of last year by $3.1 million but pared profits by $21.3 million for fiscal 2001 and by $9.2 million in 2000.

The company had initially warned about possible restatements back in March.

In last week’s exhaustive government filing and accompanying press release, the company said earnings were impacted by at least 22 different issues, including how it treated gains associated with unit conversions, impairment of long-lived...

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