The Work

March 29, 2011 4:07 PM

Jones Day One of Four Firms Advising on Harry & David Bankruptcy

Posted by Brian Baxter

Four firms are advising various parties in the bankruptcy case of Harry & David, a mail order marketer known for its fruit and snack baskets. The company filed for Chapter 11 in Delaware on Monday.

Medford, Ore.-based Harry & David, which faced the threat of bankruptcy since earlier this year, turned to Jones Day and Delaware firm Richards, Layton & Finger for counsel.

Global M&A chair Robert Profusek and David Heiman, the founder of Jones Day's bankruptcy and restructuring practice, are advising the debtor, along with business restructuring and reorganization partners Brad Erens and Mark Cody, capital markets partner Bradley Brasser, banking and finance partner Stephen Hall, and finance counsel Joseph McKernan.

Daniel DeFranceschi and Paul Heath, bankruptcy and corporate restructuring partners at Richards Layton, also are advising Harry & David as local counsel. Neither Richards Layton nor Jones Day has yet filed billing statements with the bankruptcy court. Harry & David's general counsel is Robert Bluth.

Reuters reports that Harry & David's prepackaged bankruptcy filing will give bondholders control of the company, which foundered amid falling sales.

The prepackaged bankruptcy was blessed by a majority of the company's noteholders and allows Harry & David to turn $198 million in debt into equity, Reuters reports. The gift basket company disclosed in an SEC filing on Monday that it secured $100 million in debtor-in-possession financing to continue operations while in bankruptcy court.

An ad hoc committee of Harry & David noteholders is being advised by Stroock & Stroock & Lavan financial restructuring cochair Kristopher Hansen, a veteran of the Trump casino bankruptcy wars.

Munger, Tolles & Olson partner Thomas Walper in Los Angeles is advising private equity and investment firm Wasserstein & Co., a majority stockholder and bondholder in Harry & David. Bloomberg reports that Wasserstein paid about $230 million for a controlling stake in the company in 2004. The Am Law Daily covered Walper's pro bono bankruptcy work last year.

George Majoros, Jr., a member of Harry & David's board and a president and COO at Wasserstein, is a Jones Day alum. (Majoros was a board member of ALM Media, parent company of The Am Law Daily, while it was under the Wasserstein umbrella.)

In February, Harry & David replaced its CEO Steven Heyer with Kay Hong, a managing director of turnaround and restructuring services firm Alvarez & Marsal.

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