Harry and David Holdings Inc. filed Chapter 11 bankruptcy on Monday. The filing, not unexpected, comes four weeks after Harry & David closed its store at Legends Outlets Kansas City. The privately held Medford, Ore., specialty online foods retailer, which has trimmed down to 70 stores nationwide, lists one other Kansas City-area store at Town Center Plaza in Leawood.
In the bankruptcy document filed in U.S. Bankruptcy Court in Delaware, Harry & David said it struck a deal with holders of about $160 million, or 81 percent, of outstanding loans to trim debt and reorganize in Chapter 11. It listed assets and debt of as much as $500 million.
“We believe that entering into this agreement provides the best opportunity for Harry & David to restructure its balance sheet on an expedited basis, strengthen its operations and create long-term value, while continuing to provide customers with the highest-quality products and service,” Kay Hong, chief restructuring officer and interim CEO, said in a written statement. “Harry & David is an iconic brand, and we believe this is an important first step to position the business for long-term profitable growth.”
Harry & David lost $39.2 million in fiscal 2010, and sales were down 13 percent.
According to the terms of the agreement, the companybs existing common stock would be canceled without any distribution payment. Shares of stock in the reorganized company would be issued to some senior note holders and holders of general unsecured claims. …