Akorn, Inc., a specialty pharmaceutical company, has filed for Chapter 11 of the U.S. Bankruptcy Code to execute an in‑court sale of its business and address litigation-related overhangs to best position the business for success under new ownership. In connection with the filing, the Company has executed a Restructuring Support Agreement with lenders representing more than 75% of its debt, who will collectively serve as a “stalking horse” bidder in the Company’s sale process and provide additional liquidity to fund business operations during this process.

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 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. subsidiaries with ample liquidity to fund their business operations and administrative expenses during the Chapter 11 cases.

Akorn plans to continue to operate as usual throughout the duration of the Chapter 11 and sale process, including meeting its contractual obligations and making payments to vendors. The Company has filed customary motions with the Bankruptcy Court intended to allow Akorn to maintain normal operations and fulfill its go-forward commitments to customers, suppliers, associates and other stakeholders.

Doug Boothe, Akorn’s President and Chief Executive Officer, said, “Today’s announcement represents a decisive, positive step for Akorn, one that we have been able to achieve because of the underlying strength of our business and potential for growth. We look forward to separating legacy litigation and debt from the Company’s most valuable assets – our products, our people, our manufacturing facilities and our knowledge – so that we can move forward unencumbered by these liability exposures under new ownership that believes in our future.”

The Chapter 11 cases include Akorn and each of its U.S. subsidiaries. The Company’s entities in India and Switzerland are not included in the Chapter 11 filing.