Archibald Candy files prepackaged Chapter 11

New York, June 19 - Archibald Candy Corp. said it and its sole shareholder Fannie May made a prepackaged Chapter 11 filing in the U.S. Bankruptcy Court for the District of Delaware.

Archibold Candy said the filing included a joint plan of reorganization which has been agreed with holders of 83% of the company's 10¼% senior secured notes. Lock-up agreements have been signed with the noteholders.

Under the restructuring plan, the company will see a "significant deleveraging" and $17.5 million in annual interest payments will be eliminated.

The Chapter 11 filing, made on June 12, does not include Archibald Candy (Canada) Corp., a wholly owned subsidiary that operates the Laura Secord business.

Archibold obtained a $45 million term loan and revolving credit facility from Foothill Capital Corp. and Ableco Finance, LLC to finance operations during the Chapter 11 proceedings. Part of the proceeds were used to pay off borrowings under Archibald's revolving credit facility with The CIT Group/Business Credit, Inc.

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