May 24th, 2011

Harry & David Files Reorganization Plan

posted in: gourmet, news

Harry and David Holdings Inc. expects to exit bankruptcy in late summer based on the terms of its recently filed joint plan of reorganization.

The Medford-based specialty foods and gifts retailer filed for Chapter 11 on March 28, after experiencing years of declining revenue and ownership changes.
Harry & David lost $39.2 million in fiscal 2010 and sales fell 13 percent.

A Harry & David store in the Chandler Fashion Center closed in January. Locations in Scottsdale Fashion Square Mall and the Outlets at Anthem closed in February.

The plan calls for Harry & David to convert all of its approximately $200 million of outstanding public notes into equity in the reorganized company.

In addition, a group of existing note holders has agreed to backstop a $55 million equity offering that will provide financing to the company after it emerges from bankruptcy. The company has also secured a $100 million revolving loan commitment to finance operations post-Chapter 11. That loan will replace a $100 million post-petition revolving loan facility.

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