The Turnaround Management Association (TMA) has named a Lowenstein Sandler-guided Chapter 11 process and successful sale of assets as its 2020 Large Company Transaction of the Year. Lowenstein represented longtime client Aceto Corporation (Aceto) in a multifaceted plan of liquidation approved by the U.S. Bankruptcy Court for the District of New Jersey on September 12, 2019.
In addition to Lowenstein, others responsible for the transaction’s highly successful outcome included Aceto’s CEO Bill Kennally, Interim CFO Rebecca A. Roof of AlixPartners, former Aceto Chief Legal Officer Steven S. Rogers (now a Lowenstein partner), and the company’s Board of Directors, along with management and restructuring consultant AlixPartners, LLP and investment banker PJT Partners Inc.
TMA presents the annual award to professional teams that orchestrate a nonoperational restructuring, including merger and acquisition, sale, loan, liquidation, debt restructuring, or other capitalization typically within a court process, to preserve value in a struggling business. The Aceto transaction was recognized within the Large Company category, which considers companies with revenue at the time of the transaction of $300 million to $1 billion.
The transaction and subsequent plan of liquidation were the result of a comprehensive evaluation of strategic alternatives to address Aceto’s debt burden and other issues. After assessing its options, Aceto’s Lowenstein-advised Board of Directors determined that court-supervised sales of substantially all the company’s assets was in the best interest of stakeholders, resulting in the negotiation of stalking-horse asset purchase agreements to sell Aceto’s global chemicals business assets for an aggregate value of $422 million and Aceto’s subsidiary, Rising Pharmaceuticals, for gross proceeds of $15 million in cash and the assumption of $122 million of liabilities. The transactions were part of a broader legal representation of Aceto by Lowenstein that included resolution of between $500 million and $1 billion in asserted secured, priority, administrative, and unsecured claims against Aceto and its subsidiaries, the orderly liquidation of the company’s remaining assets, and the prosecution of affirmative litigation and claims objections to further enhance the recoveries to Aceto’s stakeholders. To date, Aceto creditors have received recoveries of approximately 95% of their allowed claims with an expectation of additional future distributions. (See the TMA's description of the Aceto matter.)
Lowenstein’s representation required coordination among diverse practice groups, including Corporate, Mergers & Acquisitions, Bankruptcy, Financial Reorganization & Creditors' Rights, Tax, and Litigation, as well as seamless integration with foreign counsel, as Aceto operated in 15 foreign jurisdictions.
The Lowenstein team included Steven E. Siesser, Peter H. Ehrenberg, Andrew P. Erdmann, Elisia M. Klinka, Kenneth A. Rosen, Michael S. Etkin, Lesley P. Adamo, Paul Kizel, Wojciech F. Jung, Gavin J. Rooney, Reynold Lambert, Philip J. Gross, Alexander Brooks, Jason Gindi, Michael Savetsky, and Michael Papandrea.
Award recipients will be recognized at IMPACT 2020: The TMA Experience, September 29-October 1.
About the Turnaround Management Association (TMA)
The Turnaround Management Association (TMA) is the most professionally diverse organization in the corporate restructuring, renewal, and corporate health space. Established in 1988, TMA has almost 10,000 members in 54 chapters worldwide, including 34 North American chapters. Members include turnaround practitioners, attorneys, accountants, advisors, liquidators, consultants, as well as academic, government employees, and members of the judiciary.
About Lowenstein Sandler LLP
Lowenstein Sandler is a national law firm with over 350 lawyers based in New York, Palo Alto, New Jersey, Utah, and Washington, D.C. The firm represents leaders in virtually every sector of the global economy, with particular emphasis on investment funds, life sciences, and technology. Recognized for its entrepreneurial spirit and high standard of client service, the firm is committed to the interests of its clients, colleagues, and communities.
Stephen J. Kimmerling
Director, Marketing Communications
Lowenstein Sandler LLP
T: +1 973.597.6176