Harry & David’s Bankruptcy Exit Plan Won U.S. Judge’s Approval

by San Antonio Attorney

A judge in Delaware gave permission to Harry & David Holdings to forward their bankruptcy exit plan for creditors voting towards the month end of July.

Harry & David, a gift basket company, won Judge Mary Walrath’s approval in a U.S. Bankruptcy Court hearing in Delaware on Friday, according to court papers filed. The bankruptcy court judge is allowing creditors to vote on the reorganization plan until July 29, although the specific timeline has not been fixed.

The restructuring proposal is going to make Harry & David’s outstanding public notes of $200 million into equity in the restructured company. Basically, the company filed what is commonly known as a prearranged Chapter 11.

Harry & David filed for bankruptcy in March due to dropping sales. The maker of fruit-filled gift baskets filed for bankruptcy protection under Chapter 11. The company mentioned in its bankruptcy petition that its giant competitors like Wal-Mart Stores Inc. are part of the reasons why it is struggling to manage its current debts. The company continues to operate without interruption during the bankruptcy process.

In May, Harry and David filed its bankruptcy exit plan which was supported by the majority of its bondholders and creditors. There are parties that also made objections, which include Pension Benefit Guaranty Corp. The United States government agency balked at the very idea of canceling the company’s retirement program which Harry & David had requested.

According to PBGC, this kind of step would create a $45 million debt of Harry & David to the PBGC. Harry & David disagrees with the figure.

A lawyer of Harry & David did not immediately respond to a phone call trying to get a comment. A PBGC spokesperson could not be asked for a comment on Friday.

You can protect your assets from creditors while you reorganize you debt. Seek for a San Antonioattorney’s advice.

 

 

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