Lowenstein Sandler represented longtime client Aceto Corporation (Aceto) and its subsidiaries in a Chapter 11 filing and plan of liquidation, which was approved on September 12, 2019, by the Hon. Vincent F. Papalia of the U.S. Bankruptcy Court for the District of New Jersey.
This is part of a broader legal representation, which included serving as legal counsel to Aceto in its entering into a stalking-horse asset purchase agreement with an affiliate of New Mountain Capital to sell Aceto’s global chemicals business assets for aggregate value of $422 million, including cash and the assumption of certain liabilities and subject to certain adjustments. In addition, Lowenstein represented Aceto’s subsidiary, Rising Pharmaceuticals, Inc. (Rising), in entering into a stalking-horse asset purchase agreement with Shore Suven Pharma to sell Rising’s pharmaceutical assets for gross proceeds of $15 million in cash and the assumption of $122 million of certain liabilities.
Aceto is an international company engaged in the development, marketing, sale, and distribution of human health products, pharmaceutical ingredients, and performance chemicals. New Mountain Capital is a leading, growth-oriented investment firm with over $20 billion in assets under management. Shore Suven Pharma is a joint venture of Shore Pharma and Suven Life Sciences Limited.
The sales were conducted under Section 363 of the U.S. Bankruptcy Code, subject to court-approved bidding procedures, potential receipt of higher and better offers at auction, and approval by the court.
To facilitate the sale and satisfy its debt obligations, Aceto and its U.S. subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. Aceto’s foreign chemicals business subsidiaries were not included in the filing but were included in the sale. The representation has required a multifaceted, multijurisdictional effort, including coordination among various Lowenstein practice groups such as corporate, M&A, tax, and real estate, as well as seamless integration with foreign counsel, as the client operates in more than 15 non-U.S. jurisdictions.
These transactions were the result of a comprehensive evaluation of strategic alternatives to address the company’s debt burden. After assessing its options, Aceto’s board determined that court-supervised sales of the company’s chemicals business assets and Rising were in the best interest of the company and its stakeholders, providing stability and deep capital resources to the company and ensuring the continuity of customer, partner, and supplier relationships critical to the company’s business operations and success.
Lowenstein Sandler served as debtor counsel to Aceto. PJT Partners LP acted as the company’s financial advisor and investment banker, and AP Services, an affiliate of AlixPartners LLP, served as Aceto’s Chief Financial Officer and advisor. The Lowenstein team included Kenneth A. Rosen, Steven E. Siesser, Peter H. Ehrenberg, Lesley P. Adamo, Paul Kizel, Michael S. Etkin, Wojciech F. Jung, Philip J. Gross, Michael Savetsky, Andrew P. Erdmann, Elisia M. Klinka, and Michael Papandrea.