Specialty Retailer Harry & David Files For Bankruptcy Protection - WSJ.com

Harry & David Holdings Inc., the specialty gourmet fruit retailer known for its gift baskets, has filed for Chapter 11 bankruptcy protection.

Burdened by nearly $200 million in short- and long-term obligations, Harry & David has been battered in the recession, with customers cutting back on luxury items like gift baskets of fruits and snacks. The retailer, which recently breached terms on a revolving credit line and skipped an interest payment due bondholders, had been working with creditors on a plan to restructure, and The Wall Street Journal had reported over the weekend that a bankruptcy filing was imminent.

Harry & David posted weak holiday results that left it unable to borrow money under the terms of its revolving credit line. The inability to borrow meant Harry & David couldn't continue to adequately fund operations or make looming debt payments. In a regulatory filing, the company had raised doubt about its ability to continue as a going concern.

via online.wsj.com