Gurnee-Based Akorn Pharmaceuticals Under Investigation After Layoffs

GURNEE, IL — An Illinois pharmaceuticals company whose corporate headquarters are based in Gurnee abruptly closed its doors last week after company officials told employees in a Zoom call that they had no other choice but to file bankruptcy and were forced to immediately lay 400 people off immediately.

In a video call with employees, Akorn Pharmaceuticals CEO and President Douglas Boothe told workers that the company was filing for Chapter 7 bankruptcy in a matter of days. Boothe said in a video obtained by the Decatur Herald-Review that the upcoming filing was different than in 2020 when the company filed for Chapter 11 protection and that last week’s announcement was unplanned.

Boothe told employees in the video call that last week's announcement came after a proposed sale of the company fell through after a bid that covered all of the company's liabilities and debt never came in.

Boothe said in the video that the bankruptcy forced the company to cease operations immediately, which he acknowledged, would be a “tremendous shock” to employees. Workers were told in the call that they would be paid through Thursday, a day after Boothe made the announcement.

He said that employees’ health benefits would be paid through the 28th of March but said because of the bankruptcy filing, severance packages and the offering of COBRA insurance coverage would not be possible.

In addition to its corporate headquarters, Akorn also operates a distribution center in Gurnee as well as a research and development site in Vernon Hills, according to its website.

The Illinois Department of Labor will launch an investigation immediately, according to agency spokesman Paul Cicchini. Under state law, companies must provide the state with 60 days notice of a mass layoff to allow for the coordination of resources and support for employees affected by the layoffs, a statement from the Department of Labor said.

According to the statement, the state did not receive any notification from Akorn about the layoffs until Wednesday night — after the company told employees they were being let go. Boothe told employees to gather their belongings that day as they would not be allowed into their respective facilities on Thursday.

“Not only did (Akorn) fail to submit a WARN notice to the state prior to laying off employees, it gave its hardworking employees only 24 hours notice of permanent layoffs, which is inconsistent with industry best practices and lacks basic consideration for their employees,” the statement said.

The statement indicated that if violations are found, the Department of Labor will assess civil penalties against the company.