Bloomberg Law reports that Illinois-based pharmaceutical company Akorn Inc. gets the approval of the U.S. Bankruptcy Court to tap $30 million bankruptcy loan to finance its bankruptcy case as well as to facilitate the sale of its assets.
An attorney who represented Akorn told a U.S. Bankruptcy court judge that its bankruptcy plan has the support of its lenders and they expect the case to take about six months.
About Akorn Inc.
Headquartered in Lake Forest, Illinois, Akorn, Inc. is a specialty pharmaceutical company engaged in the development, manufacture and marketing of multi-source and branded pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois; Somerset, New Jersey; Amityville, New York; Hettlingen, Switzerland and Paonta Sahib, India that manufacture ophthalmic, injectable and specialty sterile and non-sterile pharmaceuticals.
Akorn reported a net loss of $226.8 million for the year ended Dec. 31, 2019, compared to a net loss of $401.9 million on $694.02 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.28 billion in total assets, $1.05 billion in total liabilities, and $234.3 million in total shareholders’ equity.
BDO USA, LLP, in Chicago, Illinois, the Company’s auditor since 2016, issued a “going concern” qualification in its report dated Feb. 26, 2020, citing that the Company has suffered recurring losses from operations and has a net working capital deficiency that raise substantial doubt about its ability to continue as a going concern.
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As reported by the TCR on Feb. 24, 2020, Moody’s Investors Service downgraded the ratings of Akorn, Inc. including the Corporate Family Rating to Caa3 from Caa1. The downgrade reflects the high risk of a near-term bankruptcy filing by Akorn, given its ongoing litigation and $845 million term loan maturity in April 2021.
Also in February 2020, S&P Global Ratings lowered its issuer credit rating on Akorn Inc. to ‘CCC-’ from ‘B-’ with negative outlook. The negative outlook reflects the increasing possibility that Akorn will file for Chapter 11 protection under the U.S. Bankruptcy Code in the next six months to facilitate repayment of its outstanding debt.