Harry and David Gets Chapter 11 Exit Approval

The U.S. Bankruptcy Court in Delaware today approved Harry & David’s Chapter 11 reorganization plan, which will allow the food and gifts merchant will emerge from bankruptcy on Sept. 13.

The plan allows Harry & David to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. That includes an equity capital raise that will generate $55 million in equity financing upon the Harry & David’s emergence from Chapter 11.

The company also has a $100 million revolving loan commitment to finance its operations after the Company exits Chapter 11.

Kay Hong, a managing director at global turnaround specialist firm Alvarez & Marsal, was appointed chief restructuring officer and interim CEO for Harry & David in February. In March, shortly after lawsuits were filed by a former vendor and by a former employee, Harry & David filed for Chapter 11 protection.

Harry & David operated 122 stores as of Dec. 25, the end of its fiscal second quarter. By the time of its Chapter 11 filing, it shuttered 52 locations and is trying to shed those leases.

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