Akorn files for Chapter 11 processChristian Fernsby ▼ | May 22, 2020
Akorn announced that the Company and its U.S. subsidiaries filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in United States Bankruptcy Court for the District of Delaware 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.
In accordance with the Company's previously announced sale process, Akorn will use the legal protections of the Chapter 11 process to execute a sale of its business in accordance with the milestones set forth in the Restructuring Support Agreement.
As a result of negotiations, Akorn and certain of its existing lenders have agreed to a Stalking Horse Asset Purchase Agreemen whereby the existing lenders will serve as the "stalking horse" bidder in the court-supervised sale of the business, which will be subject to further marketing during the Chapter 11 process in accordance with the Company's proposed bid procedures.
Other buyers will continue to have the opportunity to improve on this bid for the Company.
To help fund and protect its operations during the Chapter 11 process, Akorn obtained consent to use cash collateral from all of its existing lenders and received commitments from certain of its lenders for $30 million in debtor-in-possession ("DIP") financing.
Upon approval of the Bankruptcy Court, the DIP financing will provide the Company and its U.S. ysubsidiaries with ample liquidity to fund their business operations and administrative expenses during the Chapter 11 cases. ■