LITTLE ROCK, Ark. -- Harvest Foods here made history when it breezed through the court portion of a prepackaged Chapter 11 in only 16 days. According to Ken Branch, chief financial officer of the 54-unit chain, "Harvest's edge in completing its financial reorganization was that we got agreement from the banks first before we went to the bondholders." As a result, the company's prepackaged Chapter 11 took 85 days from its inception in October until its completion on Dec. 19, including only 16 days in the courts, "making it one of the fastest bankruptcies in U.S. history," Branch said. According to Jay M. Goffman, the debtor attorney who handled the filing, "Even before meeting with bondholders we put together a business plan for restructuring the company and wound up [with] $80 million in new financing from Chemical Bank, a new lender. "So when we approached bondholders, it was not only with a plan involving cash but also financing." When the company sent out solicitations Nov. 22 -- 20 days before the actual filing -- it also sent a notice of the objection deadlines for both the plan confirmation and disclosure statement hearing, which enabled the process to be completed in only 16 days, Goffman explained. He said the company was able to keep news of the pending filing from trade creditors until the day of the filing by having bondholders sign confidentiality agreements. "Then, on the day we filed, we telephoned key vendors and sent letters telling trade creditors we were in the middle of a prepackaged Chapter 11, [with] all the necessary votes [in place], and that they were completely unaffected. "We told them we had a trade claim entered which allowed us to pay them in the ordinary course of business as long as they continued to extend normal trade credit." According to Branch, most of Harvest's financial problems stemmed from its original leveraged buyout from Safeway in 1986, he noted. "We were a good company, with good controls and good systems, but with a bad balance sheet," Branch told SN. With money for capital investment limited, even after an earlier 1991 reorganization, Harvest watched its sales shrink every year since 1990, he said. However, close attention to cost controls and technology kept cash flow moving in a positive direction, Branch noted, and that asset, combined with the company's ability to pay its bills, was looked on favorably by its bankers, which helped propel the reorganization's rapid forward movement. "Now, with the reorganization completed, we've got our debt load down to a more normal level, and it's amortized over seven-and-a-half years, with no balloon payments," Branch said. Debt was reduced from $147 million to $75 million, and negative net worth fell from a deficit of $122 million to a deficit of $13 million, he pointed out. "And we've reduced our debt service to $6.5 million a year, and our bankers wrote covenants that have enabled us to take an aggressive position on capital expenditures to respond to competition, which is something we couldn't do in the past," he said.