Harry & David granted interim access to $155 million in DIP financing

By Caroline Salls

Pittsburgh, March 30 - Harry & David Holdings, Inc. received court approval of its first-day bankruptcy motions, including interim approval to access its $100 million first-lien debtor-in-possession revolving credit facility from its secured lenders and a $55 million second-lien DIP term loan from its senior noteholders, according to a company news release.

The final DIP financing hearing is scheduled for April 27.

As previously reported, UBS Stamford Branch is the administrative agent on the first-lien DIP loan.

Interest on the one-year $100 million ABL facility will be Libor plus 375 basis points.

Interest on the one-year $55 million DIP notes facility will be Libor plus 1,150 bps with a 1.5% Libor floor.

The company said the DIP financing will help support its reorganization plans and enable normal post-bankruptcy operation of its business.

The company also received approval to continue to pay employees' salaries, wages and benefits in the ordinary course. In addition, the court confirmed Harry & David's ability to pay vendors for post-bankruptcy goods and services.

"We are pleased that the court has promptly granted these motions, which ensures the company will be able to continue to operate in the normal course and deliver on our commitment to providing customers with the highest quality products and service," chief restructuring officer and interim chief executive officer Kay Hong said in the release.

"Additionally, these motions will help Harry & David implement a restructuring plan to strengthen our business and emerge from this process as quickly as possible, better positioned for future success."

Harry and David, a Medford, Ore.-based gourmet food and fruit gifts purveyor, filed for bankruptcy on March 28 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 11-10884.

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