UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 1.03 | Bankruptcy or Receivership |
As previously disclosed, on May 20, 2020, Akorn, Inc. (the “Company”) and its U.S. direct and indirect subsidiaries (together with the Company, the “Company Parties”) filed voluntary cases under chapter 11 (the “Chapter 11 Cases”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On June 30, 2020, the Company Parties filed the Modified Joint Chapter 11 Plan of Akorn, Inc. and Its Debtor Affiliates (as amended, supplemented, or otherwise modified from time to time, the “Plan”) and the Bankruptcy Court confirmed the Plan on September 4, 2020.
The Company Parties entered into an asset purchase agreement (the “Stalking Horse APA”), dated as of May 20, 2020, with certain of the Company’s existing lenders (collectively, the “Buyer”), pursuant to which the Buyer agreed to purchase, subject to the terms and conditions contained therein, substantially all of the assets of the Company Parties (the “Sale”). The Stalking Horse APA, subject to an auction to solicit higher or otherwise better bids, was approved by the Bankruptcy Court on June 15, 2020. The Bankruptcy Court also approved the Buyer as the “stalking horse” bidder. Pursuant to the Stalking Horse APA, if the Company Parties received any bids that were higher or otherwise better, the Company Parties would have conducted an auction. No qualified and actionable bids were received by the deadline and, as a result, the auction was cancelled.
On September 2, 2020, the Bankruptcy Court approved the Sale pursuant to Section 363 of the Bankruptcy Code. On October 1, 2020, the Company Parties consummated the Sale, thereby completing the disposition of substantially all of the Company Parties’ assets.
Under the terms of the Stalking Horse APA, the Buyer acquired substantially all of the assets of the Company Parties for aggregate consideration comprising (i) the assumption of certain liabilities, (ii) the credit bid of 100% of the lenders’ pre-petition claims under the Company’s term loan agreement, which amount was satisfied by discharging all of such lenders’ pre-petition claims pursuant to section 363(k) of the Bankruptcy Code, and (iii) an amount in cash equal to the amount set forth in the “Wind-Down Budget” included as an exhibit to the Stalking Horse APA.
Following the consummation of the Sale, on October 1, 2020 (the “Effective Date”), the Company Parties filed a Notice of Effective Date with Bankruptcy Court and the Plan became effective in accordance with its terms. All of the shares of common stock of the Company outstanding immediately prior to the Effective Date, were cancelled and discharged and are of no force and effect.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth under Items 1.03 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 3.03 | Material Modification to the Rights of Security Holders. |
The information set forth under Items 1.03 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 5.01 | Changes in Control of Registrant. |
The information set forth under Items 1.03 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As of the Effective Date, pursuant to the Plan, the existing board of directors of the Company dissolved without any further action required on the part of the Company Parties.
| Item 8.01 | Other Events |
Deregistration of Securities
In conjunction with its emergence from bankruptcy, the Company intends to file post-effective amendments to each of its Registration Statements on Form S-8 and promptly file a Form 15 with the Securities and Exchange Commission (the “SEC”) to deregister its securities under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and suspend the Company's reporting obligations under Sections 13(a) and 15(d) of the Exchange Act. Upon the filing of the Form 15, the Company’s obligation to file periodic and current reports with the SEC, including Forms 10-K, 10-Q and 8-K, will be immediately suspended.
Press Release
On October 1, 2020, the Company issued a press release announcing the completion of the Sale, its emergence from the restructuring process and successful consummation of the Plan. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 8.01.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are filed with this report:
|
Exhibit Number |
Description |
| 99.1 | Press Release dated October 1, 2020. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Akorn, Inc. | ||
| Date: October 2, 2020 | By: | /s/ Duane A. Portwood |
| Duane A. Portwood | ||
| Chief Financial Officer |
Exhibit 99.1
Press Release
Akorn Successfully Completes Sale to Lenders and Exits Chapter 11 Protection
Company positioned to enter its next phase of growth with new ownership and a more sustainable capital structure
LAKE FOREST, Ill., Oct. 1, 2020 -- Akorn, a leading specialty pharmaceutical company ("Akorn" or the "Company"), today announced the successful completion of its sale to certain of the Company’s term loan lenders, which was approved by the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on September 2, 2020. This milestone marks the culmination of Akorn’s Chapter 11 cases, with the Company well-positioned to continue to fulfill its mission to improve patients’ lives through the quality, availability and affordability of its products.
In tandem with the completion of the sale, Akorn’s long-term debt has been cut by more than half, and the Company has secured a revolving credit line to ensure a stronger balance sheet and operating flexibility as it looks to enter a new phase of growth.
Doug Boothe, Akorn’s President and Chief Executive Officer, commented, “Today marks the start of an exciting new chapter for Akorn. We are moving forward with significantly reduced debt, better cash flow, strong operations and a diverse product portfolio that positions Akorn well for long-term growth and a brighter future in the years to come. Our ability to achieve the goals we set at the beginning of our restructuring process is a testament to the hard work and support of our associates, as well as the dedicated partnership of our lenders, customers and suppliers throughout this process.”
Following the official completion of the transaction, Akorn is now operating as a private entity under the legal name of Akorn Operating Company LLC.
Cautionary Note Regarding Forward-Looking Statements
This press release includes statements that may constitute “forward-looking statements,” including those regarding the Company’s long-term business plan and outlook. A number of important factors could cause actual results of the Company and its subsidiaries to differ materially from those indicated by such forward-looking statements and readers should not place undue reliance on the Company’s forward-looking statements. These forward-looking statements are based on information, plans and estimates at the date of this release. The Company undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
About Akorn:
Akorn develops, manufactures and markets specialty pharmaceuticals, including prescription, consumer health and animal health products. As an industry leader in branded and generic products in alternate dosage forms such as ophthalmics, injectables, oral liquids, otics, topicals, inhalants and nasal sprays, we focus each day on our mission to improve lives, through the quality, availability and affordability of our products. Additional information is available on Akorn’s website at www.akorn.com.
Media:
Akorn@fticonsulting.com
Cover |
Oct. 01, 2020 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Oct. 01, 2020 |
| Entity File Number | 001-32360 |
| Entity Registrant Name | Akorn, Inc. |
| Entity Central Index Key | 0000003116 |
| Entity Tax Identification Number | 72-0717400 |
| Entity Incorporation, State or Country Code | LA |
| Entity Address, Address Line One | 1925 W. FIELD COURT |
| Entity Address, Address Line Two | SUITE 300 |
| Entity Address, City or Town | LAKE FOREST |
| Entity Address, State or Province | IL |
| Entity Address, Postal Zip Code | 60045 |
| City Area Code | 847 |
| Local Phone Number | 279-6100 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | false |