Akorn modified plan of reorganization confirmed by bankruptcy court

By Caroline Salls

Pittsburgh, Sept. 8 – Akorn, Inc.’s modified plan of reorganization was confirmed Friday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Akorn 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 Akorn’s business operations during this process.

The stalking horse agreement provided for a credit bid valued at $1.05 billion as of the expected closing of the sale transaction. The sale to the lenders was approved on Sept. 2.

Under the plan, an administrator will be appointed on the effective date to wind down Akorn’s estates, monetize any remaining assets and make distributions to creditors.

The stalking horse bidder has agreed to fund a $35 million wind-down budget.

Priority claims will be paid in full in cash.

Other secured claims will be reinstated, holders will be paid in full in cash or receive the collateral securing the claims.

Holders of general unsecured claims not assumed by the buyer will receive a share of distributable proceeds. Those that are assumed will be paid in full in cash by the purchaser.

Intercompany interests will be reinstated.

Holders of Akorn interests will receive a share of distributable proceeds.

Akorn is a Lake Forest, Ill.-based niche pharmaceutical company. The company filed bankruptcy on May 20 under Chapter 11 case number 20-11177.

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