On September 1, 2020, the United States Bankruptcy Court for the District of Delaware approved the sale of Akorn’s business to our existing lenders. This critical milestone allows Akorn to move beyond the Chapter 11 process under new ownership. We are working to finalize customary closing obligations and anticipate the sale will be completed in the next few weeks.
As has been the case throughout the Chapter 11 process, Akorn will continue normal operations and meet commitments to our stakeholders. We look forward to emerging as a more vibrant company, even better positioned to improve patients’ lives through the quality, availability and affordability of our products.
To Our Valued Suppliers,
As we shared earlier this year, Akorn has been working to execute a sale process that positions our business for long-term success. On May 20, 2020, we took decisive action to achieve this goal by filing for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code, and we will use the process and legal protections provided by Chapter 11 to execute the sale of our business.
Operating Our Business and Meeting Obligations to Suppliers
Please know that we are committed to continuing our relationships with suppliers throughout this period and expect to operate our business as usual and meet our obligations, including payments to suppliers. As part of the Chapter 11 process, we filed certain motions with the Court to ensure the interests of our stakeholders are protected. These motions are typical in the Chapter 11 process and were heard and approved, either on an interim or final basis, by the Court on May 22, 2020. Additionally, all of our existing lenders have consented to our use of cash collateral and certain lenders have provided commitments for $30 million in debtor-in-possession (also called “DIP”) financing – $10 million of which the Court has already authorized us to access. Following final approval by the Bankruptcy Court, this financing will provide us with ample liquidity to fund and protect our business operations during the Chapter 11 process. We are confident these actions will facilitate a smooth transition into Chapter 11 and through the rest of our sale process.
We fully expect to pay suppliers in the ordinary course for all goods and services delivered on or after our Chapter 11 filing. Leading up to this filing, we have continued to pay our suppliers and vendors pursuant to the terms of our contracts. In the few select cases where there are invoices outstanding for goods or services delivered prior to the day of our Chapter 11 filing, these claims, called “pre-petition claims”, will need to be settled as a part of the Chapter 11 process. If you believe you have a pre-petition claim, you may file a proof-of-claim form, which is available at www.kccllc.net/akorn.
Our Sale Process and Next Steps
Following a thorough marketing and negotiation process, we announced a purchase agreement with certain of our existing lenders whereby they will serve as the foundational bidder in our court-supervised sale process. Briefly, the next step in this process is to collect any additional bids from buyers other than our existing lenders now that we are under Court supervision. If any bids exceed the value of our existing lenders’ bid, the “highest and best” bid will be chosen as the winning bid to be reviewed and approved by the Court. We will then work toward emergence from Chapter 11 under a new ownership structure, which we are hoping to complete in the third quarter of 2020.
We anticipate that you might have questions about our filing and this process. Claims information can be found at www.kccllc.net/akorn. We are committed to keeping our suppliers informed throughout this process and will be providing updates as we are able.
Thank you for your continued partnership and for helping us to fulfill our critical mission of improving patients’ lives, especially during these challenging times. We are confident that this decisive action will allow us to be an even stronger partner for you in the future, and we look forward to working together as we emerge from this process even better positioned to improve patients’ lives.
Doug Boothe, CEO
No, you will not need to initiate new contracts when Akorn’s sale is complete. Our business will continue as usual, and we look forward to continuing our relationship with you as we emerge from Chapter 11 protection a stronger company, even better positioned to improve patients’ lives.
No, your point of contact on the Akorn team will not change. Please continue to work with your usual Akorn contact as usual.
Akorn is fully committed to keeping you informed throughout this process and will share updates as we are able. For claims information, please visit www.kccllc.net/akorn.