Acorda Therapeutics , Inc. (NASDAQ:OTC:ACORQ) has announced that the Bankruptcy Court has confirmed its liquidation plan, leading to the cancellation of all equity securities. This development follows the company's previous entry into a stalking horse Asset Purchase Agreement with Merz Pharmaceuticals, LLC, which involved the sale of substantially all of Acorda's assets for $185 million with certain adjustments.
On August 7, 2024, the Bankruptcy Court confirmed the Modified First Amended Joint Chapter 11 Plan of Liquidation, which stipulates that holders of the company's equity securities will not receive any distributions and such securities will be cancelled as of the effective date of the plan. The effective date is contingent upon no stay of the Confirmation Order, satisfaction or waiver of conditions precedent, and the creation of the Liquidation Trust.
A Liquidating Trustee will be appointed and a Liquidating Trust will be established on the effective date. The Trustee will manage the liquidation process, including asset distribution to holders of allowed claims, per the liquidation plan. Additionally, the Trustee will have the authority to liquidate assets, resolve claims, and oversee the dissolution of the company following the completion of final tax returns.
In connection with the liquidation plan, all directors and certain officers of Acorda, including CEO Ron Cohen and CFO Michael A. Gesser, will be deemed to have resigned from their positions on the effective date.
This announcement is based on a press release statement and contains forward-looking statements, which involve risks and uncertainties. The outcome of the Chapter 11 proceedings could significantly affect the company's business and operations. Acorda has cautioned that trading in the company's securities is highly speculative and poses substantial risks, as trading prices may not reflect the actual value realized in the bankruptcy proceedings.
Investors are advised to exercise caution with respect to investments in Acorda's securities due to the ongoing Chapter 11 proceedings. The company has stated that holders of its common stock will not be entitled to any recovery following the proceedings. The information in this article is based on Acorda Therapeutics' SEC filings.
In other recent news, Acorda Therapeutics, Inc. has made significant strides in its ongoing Chapter 11 proceedings. The company received court approval for the sale of a majority of its assets to Merz Pharmaceuticals, LLC, a development that marks a substantial step in the company's bankruptcy process. The sale, valued at $185 million minus certain adjustments, was initially agreed upon in March 2024.
In a related development, Acorda's common stock was delisted from NASDAQ, with expectations of it being deregistered under Section 12(b) of the Exchange Act around July 2024. It is anticipated to begin trading on the Pink Open Market following the delisting.
These recent developments come amidst Acorda's voluntary Chapter 11 bankruptcy filing and its noncompliance with Nasdaq's Listing Rules. The company's future operations and the commercial success of its products may be influenced by various factors, including its ability to manage relationships with suppliers, service providers, customers, and employees during the Chapter 11 process. These facts are based on recent press release statements from Acorda Therapeutics.
InvestingPro Insights
As Acorda Therapeutics, Inc. (NASDAQ:ACORQ) navigates through its Chapter 11 proceedings, the recent confirmation of its liquidation plan by the Bankruptcy Court marks a pivotal point for the company. Investors considering the implications of this development can benefit from insights provided by InvestingPro.
The company's market capitalization stands at a mere $0.07 million, reflecting the significant impact of the bankruptcy proceedings on its valuation. Additionally, the company's revenue has seen a decline over the last twelve months, with a decrease of 2.22%.
InvestingPro Tips highlight several critical factors for Acorda: the company operates with a significant debt burden and is quickly burning through cash, which is concerning for any potential recovery value. Moreover, Acorda's stock has experienced high price volatility, with a substantial return over the last week, yet it has fared poorly over the last month.
The company's short-term obligations also exceed its liquid assets, and analysts do not anticipate profitability this year. Notably, there are over 16 additional InvestingPro Tips available, which can provide further guidance to investors considering the stock's future (https://www.investing.com/pro/ACORQ).
These metrics and insights are crucial for stakeholders as they assess the potential outcomes of Acorda's liquidation process and the associated risks of investing in a company under Chapter 11 proceedings. The InvestingPro platform offers a comprehensive analysis of Acorda's financial health, which could be particularly valuable for investors during this uncertain period.
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