Harry & David preparing to file for Chapter 11

By Reuters
Posted March 28 at 5:44 a.m.

Harry & David Holdings Inc., the mail-order food company known for its fruit baskets and Moose Munch snacks, is preparing to file for Chapter 11 bankruptcy protection as soon as Monday, the Wall Street Journal reported, citing sources.

The paper said the company has a prearranged deal with creditors which would see it convert bond debt to equity.

Harry & David said in February it may go out of business unless it can agree with creditors on a plan to restructure its debt.

In the wake of disappointing holiday sales, the company said at the time that it expected to be unable to finance continuing operations unless it secures new capital and restructures its obligations, and plans to open talks with bondholders and other creditors on a recapitalization plan.

The company previously said it had retained Rothschild Inc and law firm Jones Day to explore a recapitalization.

Harry & David was not immediately available for comment.

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