Dec. 11, 2002
WASHINGTON, D.C. -- Jeffrey Rogers, former CEO of Pizza Inn, based in The Colony, Texas, has pledged 2.9 million shares of Pizza Inn common stock as collateral on a multi-million-dollar loan from Newcastle Partners L.P., a Pizza Inn shareholder group.
According to a schedule 13C document filed with the Securities and Exchange Commission on Dec. 11, Rogers needs nearly $7.4 million to pay off a $1.9 million debt to Pizza Inn and a $5.3 million debt to Wells Fargo Bank Texas.
Should Newcastle keep Rogers' 2.9 million shares of Pizza Inn common stock (which it can do as soon as Jan. 3, 2002, when repayment of the loan begins), it will boost its holdings in the 435-store pizza chain to 32.5 percent. That amount allows Newcastle to seek representation on Pizza Inn's board, which it plans to do, according to the SEC document.
Pizza Inn's stock price has soared in recent days following news that Rogers would repay $1.9 million owed to the company (See "Rogers pays off Pizza Inn debt, stock climbs"). In the chain's fourth quarter of fiscal year 2002 (ended June 30), it wrote off Rogers' debt as a loss, as it did not expect him to repay the note.
At the close of trading on Dec. 11, Pizza Inn's share price was $2.35, up 31 cents over the prior day, and $1.67 higher than its year-to-date low of 68 cents a share.