AAIPharma Emerges From Bankruptcy as Private Company
Posted March 7, 2006 1:30 a.m. EST
WILMINGTON, NC — AAIPharma
emerged from Chapter 11 bankruptcy on Tuesday with a new focus, new financing and a smaller organization.
AAIPharma converted to a private company as part of the reorganization as approved by a US Bankruptcy Court in Delaware. The firm filed for bankruptcy protection in May of last year following a financial scandal over sales methods.
"The emergence from chapter 11 represents the final milestone in our reorganization process, and a new day for AAIPharma," said Ludo Reynders, a former Quintiles executive who is president and chief executive officer of the firm. "The company has emerged with a revitalized balance sheet and the financial stability to continue to provide our clients with the high level of service they expect from AAIPharma. I am extremely proud of our organization, and I want to express my heartfelt thanks to our employees, customers, and business partners for their support of AAIPharma throughout this reorganization."
AAIPharma has secured $45 million in new financing as part of its reorganization. Among the investors is JP Morgan.
The funds will be used to cover obligations related to the bankruptcy as well as corporate purposes.
AAIPharma also named a new board of directors consisting of seven members, but the names of those selected were not disclosed.
The pharmaceutical division was sold last July for $209 million.
AAIPharma's route to bankruptcy began when questions were raised about sales practices. A former chief operating officer, David Hurley, has already pleaded guilty to charges related to a "scheme" to inflate sales results. The company launched an internal investigation in March of 2004.
AAIPharma stock traded as high as $31.50 in the first quarter of that year.
Frederick Sancilio, the founder of the company, came out of retirement to replace CEO Philip Tabbiner as the investigation unfolded. Sancilio was replaced by Reynders in September of 2004.