In October 2020, Akorn Operating Company LLC announced its emergence from chapter 11 bankruptcy as the beginning of “an exciting new chapter.” Less than three years later, the generic U.S. drugmaker ran out of money and laid everyone off. Akorn is back in bankruptcy court — this time to be sold for parts. It’s one of 12 firms this year to seek bankruptcy protection for a second or even third time after initial attempts at court-supervised rehabilitation failed, according to a Bloomberg News analysis. So-called chapter 22 filings — industry slang for repeat bankruptcies — are piling up at the fastest rate since the Great Recession, according to BankruptcyData. "Judges aren’t thrilled to see a debtor come back; nobody wants it to happen,” said Lindsey Simon, a law professor at the University of Georgia who studies bankruptcies. “It means bankruptcy failed.” David’s Bridal LLC, the biggest wedding retailer in the U.S., and Catalina Marketing, maker of well-known coupons, along with discount retailer Tuesday Morning, telecommunications company Avaya and data firm Inap, all fell back into bankruptcy this year. Such relapses follow common threads. Sometimes a company did not get enough debt off its balance sheet the first time. Or it didn’t shed unprofitable parts of the business when it had the chance, dooming its prospects when interest rates rose, or inflation forced costs higher.
