Court approves Harry & David bankruptcy plan

BANGALORE Aug 30 (Reuters) - A Delaware bankruptcy court has approved the reorganization plan of Harry & David Holdings Inc, clearing the way for the gift basket maker to emerge from bankruptcy under the control of senior noteholders.

Earlier this month, U.S. Bankruptcy Judge Mary Walrath, at a hearing in Wilmington, Delaware, had said she was prepared to approve the reorganization.

The mail-order food company, known for its fruit baskets and Moose Munch snacks, filed for Chapter 11 protection in March, citing falling sales and competition from "big-box" retailers such as Wal-Mart Stores Inc .

The reorganization plan calls for the exchange of $200 million in senior debt for equity in a restructured company. Unsecured creditors would recover about 10 cents on the dollar over a two to three-year period.

The case is In re Harry & David Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 11-10884. (Reporting by Tanya Agrawal in Bangalore; Editing by Saumyadeb Chakrabarty)