Harry & David Holdings Inc., a provider of fruit baskets and other gifts, is filing for Chapter 11 bankruptcy protection.
The Medford, Ore., company said Monday that it agreed with some senior noteholders on terms of a reorganization plan that will eliminate "substantial" debt and provide equity financing to restructure its balance sheet.
The noteholders have agreed to vote for the plan and exchange their notes for common stock.
Harry & David has been struggling as consumers cut back on their spending in the weak economy. It relies on discretionary spending that's often the first to get cut from household and business budgets.
The company brought in a restructuring expert last month and cut about 100 jobs.
Harry & David expects to continue operating during the reorganization process.