Aceto 'No Longer Requires' CEO Kennally
Executive Summary
Aceto has terminated William Kennally’s tenure as president and CEO of the struggling US firm, following deals struck to divest its Rising Pharmaceuticals generics business and chemicals unit as part of bankruptcy proceedings. Meanwhile, the Nasdaq listing has confirmed that Aceto will be delisted in mid-June.
Aceto has terminated William Kennally’s employment as president and CEO of the US company, which remains embroiled in bankruptcy proceedings that have included deals to divest a large chunk of its business.
The company recently completed the sale of its Rising Pharmaceuticals generics unit– along with Rising’s subsidiaries and related assets – to Shore Suven Pharma for $15m, as well as firming up plans to sell its chemicals business to an affiliate of New Mountain Capital. (Also see "Aceto Strikes Deal To Offload Rising For Just US$15m" - Generics Bulletin, 12 Mar, 2019.)
“As a result of the company’s disposition of its operating assets in April 2019, the company no longer requires the services of William Kennally, the company’s president and CEO,” Aceto said in a financial filing. “Accordingly, Kennally’s employment with the company was terminated on 31 May 2019, effective immediately.” However, Kennally will continue to serve as a director on Aceto’s board.
“Kennally’s termination constitutes a termination without cause and was not the result of any disagreement with the company on any matter relating to the company’s operations, policies or practices,” Aceto insisted.
The firm had recently disclosed a bonus structure for Kennally aimed at “maximizing the value of the assets it is divesting as part of bankruptcy proceedings.” (Also see "Aceto Completes Sale Of Rising Pharmaceuticals" - Generics Bulletin, 23 Apr, 2019.)
Kennally will be eligible for around $1.18m in severance benefits, receipt of which “is conditioned upon Kennally’s execution of a general release of claims of the company.”
Aceto Delisted By Nasdaq
Meanwhile, the Nasdaq stock exchange determined on 3 June that it will remove Aceto’s common stock from listing as of 13 June 2019.
Aceto in February received an initial Nasdaq delisting notification. (Also see "Aceto Files For Bankruptcy As It Offloads Rising And Chemicals Businesses" - Generics Bulletin, 22 Feb, 2019.) Despite appealing the notice, the firm was ultimately unsuccessful and at the beginning of April trading of shares was suspended.
The firm subsequently began trading its common stock on the OTC Pink Market under the symbol ‘ACETQ’. “The transition does not affect the company’s operations,” Aceto insisted, “and does not change reporting requirements under SEC rules.”
This story was updated on 6 June 2019 after Aceto issued a further financial filing correcting the severance benefits figure.