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Bloomberg
Akorn Inc’s CEO stepped down after the Delaware Supreme Court ruled that a rapid downturn in its business was grounds for Fresenius SE to walk away from a $4.3 billion buyout of the generic drugmaker.
Officials of Akorn said that Chief Executive Raj Rai was retiring now that its dispute with the German pharma company had been ended by the appellate court’s decision. A panel of judges upheld a finding that a drop in revenue and other problems prior to the deal’s closing triggered Fresenius’s right to abandon the buyout.
Shares of Akorn plunged as much as 37 percent, to their lowest intraday price in more than eight years. Trading in the stock was halted for a time after the appeals court issued its three-page ruling.
Rai, a protege of John Kapoor, who holds 23 percent of Akorn, agreed with company directors that his departure “will be treated as a resignation for good reason,†according to an Akorn filing with the US Securities and Exchange Commission. Kapoor, who served as Akorn’s CEO from 1991 to 1998, is facing federal racketeering charges related to his new company, Insys Therapeutics Inc. He is accused of bribing doctors to get them to ramp up prescriptions of an opioid painkiller, and has pleaded not guilty.
Rai, who was in court in Delaware for the appellate arguments, had total compensation for 2016 of more than $7 million, according to SEC filings.