Recessionomics

Harry & David Will File for Chapter 11 Bankruptcy

Harry & David, the makers of gourmet gift baskets, could file for Chapter 11 bankruptcy protection as soon as Monday morning, sources said Sunday. According to people familiar with the matter, Harry & David has a “prearranged” deal with creditors in which the company would convert its debt into equity, and the retailer would seek to raise additional capital through a new stock sale that creditors would probably have special rights to take part in. The 77-year-old company—one of the largest employers in the Northwest—has nearly $200 million in short- and long-term debt obligations, and it skipped a $7 million interest payment to bondholders on March 1. Over the past year, Harry & David has laid off nearly 200 people and has cut back on charitable giving.