Acorda Therapeutics’ $60 million DIP loan draws committee objection

By Sarah Lizee

Olympia, Wash., April 23 – Acorda Therapeutics, Inc.’s motion seeking final approval of a $60 million debtor-in-possession facility from secured noteholders drew an objection from the official committee of unsecured creditors, according to documents filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said the fees imposed under the DIP facility are excessive.

“Any fees paid to the lenders should be limited to the ‘new money’ portion of the DIP facility and should not be paid with respect to the prepetition amounts being rolled up,” the committee said in the objection.

The committee added that the language of the order approving the DIP financing motion precludes the committee from challenging the secured noteholders’ claims and liens.

Also, the DIP facility’s roll-up, if approved, will enable the prepetition secured parties to effectively seize currently unencumbered property to which they would otherwise have no recourse, the committee said.

“The court should not allow prepetition creditors to improve their position by expanding their collateral to the detriment of the debtors’ unsecured creditors,” the committee said.

DIP terms

GLAS USA LLC is the administrative agent and GLAS Americas LLC on the facility, which consists of a $20 million secured super-priority DIP delayed-draw facility and a $40 million rollup of secured debt.

The company can now access $10 million of the new money.

Interest will be 10.5% per annum.

There is a 2% commitment fee on new money and a 2% exit fee.

There is also a ticking fee equal to each DIP lender’s pro rata share of the product of (i) 2% per annum multiplied by (ii) for each monthly period, the actual daily amount by which the new money DIP commitments exceeds the aggregate amount of new money DIP loans advanced.

There is a $50,000 administration fee.

The facility is set to mature in 180 days.

As a reminder, Acorda entered into a restructuring support agreement with the holders of over 90% of its $207 million 6% convertible senior secured notes due 2024, which sets out milestones and conditions relating to the company’s sale, in addition to the DIP financing.

A final hearing on the DIP financing is scheduled for April 26.

Pearl River, N.Y.-based Acorda Therapeutics develops therapies to restore function and improve the lives of people with neurological disorders. The company filed bankruptcy on April 1 under Chapter 11 case number 24-22284.

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