Akorn files for bankruptcy
Pharmaceutical company Akorn and its U.S. subsidiaries have filed for Chapter 11 bankruptcy protection. The filing includes plans to execute an in‑court sale of its business while addressing litigation-related overhangs and best positioning the business for long-term success under new ownership.
Akorn said that it plans to continue to operate as usual throughout the duration of the Chapter 11 and sale process, including meeting its contractual obligations and making payments to vendors. The company has filed customary motions with the bankruptcy court intended to allow Akorn to maintain normal operations and fulfill its go-forward commitments to customers, suppliers, associates and other stakeholders.
Akorn has executed a restructuring support agreement with lenders representing more than 75% of its secured debt, who will collectively serve as a "stalking horse" bidder in the company's sale process and provide additional liquidity to fund the company's business operations during this process.
"Today's announcement represents a decisive, positive step for Akorn, one that we have been able to achieve because of the underlying strength of our business and potential for growth," said Doug Boothe, Akorn's president and CEO. "We look forward to separating legacy litigation and debt from the company's most valuable assets — our products, our people, our manufacturing facilities and our knowledge – so that we can move forward unencumbered by these liability exposures under new ownership that believes in our future."
Boothe continued,"The current public health crisis has re-emphasized that the work our associates do tirelessly each and every day is vital to those we serve. I anticipate that today's decisive action will allow us to be better positioned to continue this work for many years to come."
The company's entities in India and Switzerland are not included in the Chapter 11 filing.
Akorn said that it is working to complete the sale process in the third quarter of 2020.