Harry and David Plan Filed

(Harry and David Holdings did not have publicly traded equity prior to Chapter 11 filing.  Looks like it might, post emergence.)
 
Harry & David Holdings filed with the U.S. Bankruptcy Court a First Amended Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure  Statement, “The Plan contemplates the reorganization of the Debtors through (a) the elimination of the PBGC Claims and the Debtors’ Senior Notes in exchange for the issuance of new stock and (b) a rights offering (the ‘Rights Offering’) that will provide the PBGC and the Noteholders that meet certain SEC requirements with the opportunity to purchase stock of the reorganized Debtors in connection with their emergence from chapter 11.
 
The Debtors will utilize the proceeds of the Rights Offering to repay outstanding amounts under their second lien debtor-in-possession term loan described above and to fund the Debtors’ business operations going forward. The Rights Offering permits qualified Noteholders to purchase approximately 74.9 percent of the stock of the reorganized Debtors for $55 million.
 
Because the Plan does not require qualified Noteholders to participate in the Rights Offering, the Debtors also entered into an agreement with a specific group of their Noteholders to ‘backstop the Rights Offering (as amended, the ‘Backstop Agreement’). Pursuant to the Backstop Agreement, the Noteholders that are party to that agreement will purchase any remaining stock that was not purchased by other Noteholders or the PBGC as part of the Rights Offering.
 
In consideration for the performance of their obligations under the Backstop Agreement, the Noteholders that are party to the Backstop Agreement will receive 50,000 shares in Reorganized Holdings. The Backstop Agreement ensures that the Debtors will obtain $55 million in new equity financing upon their emergence from these cases.
 
After the Petition Date, the Debtors also obtained Bankruptcy Court approval to enter into a $100 million exit facility that would become effective on the effective date of the Plan. This facility, provided by the same lenders who provided the Debtors with a similar facility prior to the Petition Date and the $100 million first lien debtor-in- ossession revolving credit facility, permits the Debtors to maintain their historical working capital financing upon emergence from chapter 11 on terms substantially similar to those that existed prior to the Petition Date.”

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