Munger, Tolles & Olson represented Wasserstein & Co., Harry & David’s majority stockholder and holder of senior notes, in the restructuring of the mail order marketer known for its high end fruit and snack baskets. Harry & David reached an agreement with Wasserstein and other senior noteholders on a pre-arranged reorganization plan prior to filing for Chapter 11 on March 28, 2011. On Sept. 14, less than six months later, Harry & David announced that it successfully completed its reorganization and emerged from Chapter 11 in advance of the 2011 holiday season.
In preparing the restructuring, Wasserstein partnered with an ad hoc group of bondholders to negotiate a debtor-in-possession financing to fund the company during bankruptcy, and to backstop a rights offering to fund the company's exit from bankruptcy. Under the approved plan, the debtor in possession financing and bonds were converted to equity, and the company obtained a new asset backed loan to finance operations through the holiday season.
As part of the restructuring process, Wasserstein and other noteholders negotiated a settlement with the unsecured creditors committee which resulted in creditor support for the pre-negotiated plan and releases. In addition, Wasserstein, Harry & David, and other noteholders successfully obtained bankruptcy court approval, over the objection of the PBGC and after lengthy trial, to terminate the company’s defined benefit pension plan.
The successful restructuring eliminated more than $250 million in debt, provided needed liquidity, and most importantly enabled Harry & David to save thousands of jobs and preserve the hundred year old company as a going concern.
Wasserstein & Co., a private equity and investment firm, purchased a controlling stake of the company in 2005. Following the reorganization, Wasserstein is a significant equity owner, holds two of five board seats, and provides management services to the company.
Munger Tolles attorneys involved with the matter include Thomas Walper, Judith Kitano, David Goldman, Seth Goldman, Garth Vincent, Kimberly Chi and Renée Delphin-Rodriguez.