Acorda Therapeutics: $185M Stalking Horse 363 Sale and Liquidation Plan
Acorda Therapeutics April 2024 SDNY ch. 11 ran a $185M stalking horse 363 sale to Merz and confirmed a liquidation plan.
Acorda Therapeutics filed chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York on April 1, 2024, entering with a stalking-horse agreement for the sale of substantially all assets to Merz Therapeutics for $185 million. The DIP facility combined $20 million of new money with a $40 million roll-up of prepetition notes, and the milestone package moved the case from filing to a sale order in approximately ten weeks. Merz closed the acquisition of (F)AMPYRA and INBRIJA in July 2024, and the court confirmed a liquidating plan on August 7, 2024, with an effective date of August 21, 2024.
| Debtor(s) | Acorda Therapeutics, Inc. (and affiliated debtors) |
| Court | U.S. Bankruptcy Court, Southern District of New York |
| Case Number | 24-22284 |
| Judge | Hon. David S. Jones |
| Petition Date | April 1, 2024 |
| Sale Order Date | June 12, 2024 |
| Confirmation Date | August 7, 2024 |
| Effective Date | August 21, 2024 |
| Buyer | Merz Therapeutics / Merz Pharmaceuticals, LLC |
| Stalking Horse Purchase Price | $185,000,000 (subject to net working capital adjustment) |
| DIP Facility | Up to $60.0 million (up to $20.0 million new money; up to $40.0 million roll-up; 10.5% PIK interest) |
363 Sale and Liquidating Plan
Business profile and product concentration at filing. Acorda was a neurology-focused biotech with marketed products centered on multiple sclerosis and Parkinson’s disease, and it entered chapter 11 to sell those assets rather than to refinance and continue as an operating company. The stalking-horse agreement framed the transaction as a sale of substantially all assets including rights to INBRIJA, AMPYRA, and FAMPYRA for $185 million. Merz described the deal as an acquisition of two commercial medicines and related assets, positioned within a strategy in movement disorders and neurodegeneration (Merz announcement).
Commercially, Acorda’s trajectory was tied closely to AMPYRA (dalfampridine). Years earlier, an appellate ruling upheld a decision invalidating key AMPYRA patents that had been scheduled to extend into the mid-2020s, a development that opened the door for multiple generics and quickly changed the company’s revenue risk profile (Federal Circuit ruling coverage). In 2017, AMPYRA represented just under 95% of Acorda's revenue base (revenue concentration discussion). By the petition date, Acorda’s first-day materials reflected a materially smaller but still concentrated business: FY2023 net revenues of $117.6 million with product-level revenues including AMPYRA net revenue of $63.9 million, INBRIJA U.S. net revenue of $33.6 million, and additional royalty and ex-U.S. components (First Day Declaration).
Pre-filing pressures (what can be grounded). INBRIJA was described as not reaching the company’s early projection of an $800 million annual product (Fierce Pharma; pharmaphorum). Liquidity constraints were also highlighted in reporting that referenced approximately $34 million of cash as of September 2023 and the difficulty of operating with shrinking legacy cash flow (pharmaphorum; Fierce Pharma).
The strategic review led to a chapter 11 filing paired with a stalking-horse transaction and a restructuring support agreement with noteholders; the company described a process aimed at maximizing value through a competitive sale (Business Wire/MarketChameleon release). Capital structure. Acorda's principal funded debt was the 6.00% convertible senior secured notes due December 1, 2024, with approximately $207 million of principal outstanding as of the petition date (First Day Declaration).
DIP financing: structure, roll-up mechanics, and milestones. The case’s DIP package was sized at $60.0 million and combined $20.0 million of new money with up to $40.0 million of roll-up into DIP obligations (DIP motion; final DIP order). The new money was organized as two tranches: $10.0 million available upon entry of the interim order and an additional $10.0 million available upon entry of the final order. Pricing was 10.5% per annum payable in kind, with fees that included a 2.00% commitment fee (PIK, on new money commitments), a 2.00% cash exit fee, a 2.00% ticking fee on undrawn commitments, and a $50,000 administration fee.
The roll-up converted prepetition note obligations held by DIP lenders into roll-up DIP loans on a two-dollars-to-one-dollar basis (a cashless "2-to-1" roll-up).
The milestone package contemplated a bidding procedures motion within three days of the petition date, an interim DIP order within five days, a final DIP order within twenty-nine days, a sale order within roughly sixty days, a confirmation order within 105 days, and a plan effective date within 120 days.
Bidding procedures and sale process (how the calendar played out). The filing-to-sale calendar broadly tracked the DIP milestones. The court entered bidding procedures in late April 2024 (bidding procedures order), and the sale order approving the APA was entered on June 12, 2024 (sale order). Merz later announced that it closed the transaction in July 2024, describing the deal value as $185 million in cash and positioning the acquired assets as an expansion of its specialty neurology portfolio.
Asset purchase agreement economics: deposit, working-capital escrow, and true-up. The APA's price mechanics centered on a $185,000,000 base purchase price with a net working capital adjustment that ultimately determined the "final closing consideration." In addition to the purchase price, the buyer assumed specified liabilities under the APA (discussed below).
Key economic components are summarized here:
| Base purchase price | $185,000,000 |
| Deposit funds | $18,500,000 placed into escrow shortly after signing; applied to closing consideration and released at closing |
| Working capital escrow | $5,000,000 deposited into escrow at closing to settle the net working capital adjustment |
| Estimated closing statement timing | Seller delivered an estimated closing statement no later than 5 business days before closing |
| Closing statement timing | Buyer delivered a closing statement no later than 60 days after closing |
| Dispute window | Seller had 60 days to dispute the closing statement; 45-day negotiation period; accounting expert determination due within 30 days after referral |
| True-up cap | Working capital escrow functioned as the practical cap: no recourse above $5.0 million for either side on the post-closing adjustment |
What was sold: asset perimeter. The APA conveyed a broad package of commercial and regulatory assets. The acquired assets included the products themselves, specified receivables (including a Biogen royalty receivable), assigned contracts, inventory, intellectual property (including registered IP and associated goodwill), regulatory materials and authorizations, promotional materials, permits to the extent transferable, certain tangible assets, and books and records (subject to retained carve-outs). The package also included equity interests in Acorda Therapeutics Ireland Limited.
Externally, Merz framed the transaction as an acquisition of (F)AMPYRA and INBRIJA and related assets (Merz closing release; Pharmaceutical Technology summary). That framing is consistent with the APA’s emphasis on product exploitation rights, regulatory authorizations, and the commercial infrastructure needed to continue sales.
Assumed vs. excluded liabilities. The APA allocated liabilities between buyer and sellers: the buyer assumed post-closing liabilities tied to operation and product sales after closing, while the sellers retained pre-closing liabilities and legacy exposure.
Selected allocation items that tend to be dispositive in biotech/pharma cases:
| Liability category | Treatment (high level) |
|---|---|
| Product liability | Post-closing product liability tied to products sold by the buyer after closing generally assumed; pre-closing product liability tied to products sold by the sellers prior to closing generally excluded |
| Chargebacks and rebates | Post-closing economics allocated to the buyer (rights and obligations arising from post-closing sales); pre-closing chargebacks/rebates retained by the sellers |
| Assigned contracts | Buyer generally assumed performance obligations arising after closing (with contract cure addressed through the chapter 11 assumption/assignment process) |
| Employee matters | Post-closing obligations for transferred service providers generally assumed; broad pre-closing employment and benefit plan liabilities generally excluded |
| Taxes | Taxes tied to acquired assets for tax periods beginning after closing generally assumed (with excluded tax categories carved out) |
Cure and assignment mechanics. The sale order authorized assumption and assignment of selected executory contracts, and it implemented a cure notice and cure objection framework. Counterparties that did not timely object were deemed to consent to assumption, assignment, and cure amounts, with cure costs paid by the debtors on or shortly after closing. Operational impacts and workforce implications. External reporting connected the chapter 11 filing and sale process with operational downsizing, including a reference to 97 staff at Acorda’s Pearl River, New York manufacturing site being out of work by a mid-June closure date (Fierce Pharma). From sale to liquidation. The case proceeded to confirmation of a liquidating plan after the sale. The plan’s structure was designed around liquidation trust administration rather than continued operations: it provided for creation of a liquidation trust to hold residual assets and pursue recoveries for beneficiaries (plan of liquidation; liquidation trust agreement). The effective date occurred on August 21, 2024 (effective date notice), and the liquidation trust became the vehicle for claim reconciliation, distributions, and residual litigation management.
Liquidation trust governance and special waterfalls. The liquidation trust agreement identified Alex Zyngier of Batuta Capital Advisors LLC as liquidation trustee. The trust agreement implemented a special distribution split for "Alkermes litigation proceeds," allocating 90% to holders of allowed prepetition notes secured claims and 10% to holders of general unsecured claims, excluding certain deficiency claims from the noteholders' class. Projected recoveries: what the disclosure statement said and what drove the range. The disclosure statement set out projected recoveries by class. The two economically relevant impaired classes were the secured note claims and the general unsecured claims:
| Class | Claim/interest | Approx. allowed amount | Projected recovery |
|---|---|---|---|
| Class 1 | Prepetition Notes Secured Claims | $171,140,000 | 56% to 63% |
| Class 4 | General Unsecured Claims | $6.7 million to $11.4 million | 1% to 2% |
The Disclosure Statement specified two points about claim amounts. First, the allowed claim amounts were estimates based on books and records and could change materially as claims were reconciled. Second, the Class 4 projected recovery was stated as exclusive of prepetition notes deficiency claims and was tied to the carve-out cash mechanics after payment of committee professional fees; the disclosure statement described an assumption that $149,929 of carve-out cash remained for distribution to creditors after committee professional fees were paid. Carve-out cash and who participates. The plan defined "Carve-Out Cash" by reference to the DIP order and provided that general unsecured claim holders receive a pro rata share of carve-out cash only to the extent they are not prepetition noteholders. That provision excluded prepetition noteholders from pro rata participation in carve-out cash through deficiency claims.
Claims administration: claims agent and post-effective deadlines. The plan defined the claims agent role directly: "Claims Agent" was defined as Kroll Restructuring Administration LLC (or another court-approved entity) serving as claims and noticing agent. Post-effective deadlines included a professional fee claim deadline of October 5, 2024 (45 days after the effective date) and a rejection damages deadline tied to the later of September 23, 2024 and 30 days after a rejection order for contracts subject to an assumption dispute. The plan also defined a claims objection bar date generally as ninety days after the effective date (subject to extension).
Key professionals and observed fee totals (post-confirmation reporting). The debtors’ core professional lineup included Baker & McKenzie LLP as counsel (retention application), Togut, Segal & Segal LLP as conflicts counsel (retention application), Ducera Partners LLC as restructuring advisor (retention application), and Kroll Restructuring Administration LLC as claims/administrative advisor (retention application). Post-confirmation reporting later provided cumulative preconfirmation paid fee totals by firm; as of a quarter ending September 30, 2025, the report listed cumulative paid amounts including $7.0 million for Baker & McKenzie, $2.8 million for Leerink Partners LLC, $1.7 million for Ducera Partners LLC, and smaller amounts for Togut and Kroll (post-confirmation report). Releases and exculpation. The confirmation findings approved estate and third-party release provisions and described the third-party releases as consensual and tied to plan acceptance voting, with non-accepting or abstaining holders not bound by third-party releases (confirmation order). The exculpation provisions included customary carve-outs for gross negligence, fraud, and willful misconduct. Case timeline (selected milestones). The case moved from filing to sale order in approximately ten weeks and reached a confirmed liquidating plan within five months:
| Date | Milestone | Source |
|---|---|---|
| April 1, 2024 | Petition date; stalking-horse sale announced | press release |
| April 2024 | DIP motion filed and interim/final DIP orders entered | DIP motion; final DIP order |
| April 29, 2024 | Bidding procedures order entered | bidding procedures order |
| June 12, 2024 | Sale order approving APA entered | sale order |
| July 2024 | Buyer announced transaction closing | Merz closing release |
| August 7, 2024 | Plan confirmation order entered | confirmation order |
| August 21, 2024 | Plan effective date | effective date notice |
Frequently Asked Questions
When did Acorda Therapeutics file for chapter 11 bankruptcy?
Acorda filed chapter 11 petitions on April 1, 2024 in the U.S. Bankruptcy Court for the Southern District of New York.
Why did Acorda file for chapter 11?
Acorda entered chapter 11 to run a court-supervised sale of substantially all assets with a stalking-horse agreement in place for its marketed products (press release announcing the APA and filing). The company’s pre-filing narrative centered on a long deterioration after AMPYRA’s patent protection weakened and generics became a central risk to its revenue base (patent ruling coverage; revenue concentration discussion).
What assets did Acorda sell in chapter 11, and who bought them?
The chapter 11 sale transferred Acorda’s key product rights and related commercial and regulatory assets to Merz. The stalking-horse deal was described as a sale of substantially all assets including rights to INBRIJA, AMPYRA, and FAMPYRA to Merz for $185 million (deal announcement; BioPharma Dive). The sale order approved the APA and authorized the transfer of acquired assets and assignment of selected contracts (sale order).
How much did Merz pay for Acorda’s assets, and were there post-closing adjustments?
The APA's base purchase price was $185,000,000. The APA also included a net working capital adjustment process with a $5.0 million working capital escrow used to settle the true-up, which effectively capped post-closing recourse for the adjustment.
What were the DIP financing terms in the case?
The DIP facility totaled up to $60.0 million, consisting of up to $20.0 million of new money and up to $40.0 million of roll-up, with pricing that included 10.5% PIK interest and customary fees (DIP Motion; Final DIP Order). The DIP motion also included an expedited milestone schedule that targeted a sale order within about sixty days of the petition date and a plan effective date within about 120 days.
What happened after the Merz sale closed?
After the sale, the chapter 11 case proceeded to a liquidating plan rather than an operating reorganization. The plan created a liquidation trust to administer remaining assets, reconcile claims, and make distributions. The Plan of Liquidation became effective on August 21, 2024.
Was Acorda delisted from Nasdaq after the bankruptcy filing?
Acorda announced a Nasdaq delisting effective April 12, 2024 after Nasdaq notified the company of the suspension and delisting following the chapter 11 filing.
What were key post-effective deadlines in the liquidation?
The effective date notice set a professional fee claim deadline of October 5, 2024 (45 days after the effective date) and a rejection damages deadline tied to the later of September 23, 2024 and 30 days after entry of a rejection order for contracts subject to an assumption dispute (effective date notice).
Who is the claims agent for Acorda Therapeutics?
Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.
Read more ElevenFlo chapter 11 case research on the ElevenFlo blog.
