Harry & David files for bankruptcy to slash debt
Mail-order food company Harry & David Holdings Inc filed for bankruptcy in a Delaware court under a pre-arranged deal with creditors that includes swapping $198 million of senior notes into equity.
The company, known for its fruit baskets and Moose Munch snacks, has secured a $100 million debtor-in-possession (DIP) loan to continue operations while in bankruptcy.
In its Chapter 11 petition, the company listed assets and debt in the $100-$500 million range. Wells Fargo bank was named the largest unsecured creditor with a claim of about $140.2 million.
Creditors holding about 81 percent of the company's senior notes have agreed to support the reorganization plan and backstop a $55 million rights offering that will finance the company's exit from Chapter 11.
In addition, the company has also secured a commitment from its current lenders to provide up to $100 million in exit financing to facilitate the plan of reorganization, Harry & David said in a statement.
The company's owners include affiliates of private equity firm Wasserstein & Co and hedge fund Highfields Capital Management, which paid $252.9 million for the company in 2004.
According to its website, Harry & David's roots date to 1910, when founder Samuel Rosenberg acquired 240 acres of pear orchards in southern Oregon.
The case is In re: Harry & David Holdings Inc, U.S. Bankruptcy Court, District of Delaware (Delaware), No: 11-10884.
(Reporting by Santosh Nadgir; Editing by Maju Samuel)
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