Mallinckrodt Plc went bankrupt for the second time in less than three years, with plans to dramatically cut its debt load and reduce a sweeping opioid settlement.
(Bloomberg) — Mallinckrodt Plc went bankrupt for the second time in less than three years, with plans to dramatically cut its debt load and reduce a sweeping opioid settlement.
The 156-year-old company filed for Chapter 11 in Delaware on Monday, listing assets and liabilities of between $1 billion to $10 billion each. The company had earlier disclosed plans to file for bankruptcy again.
Under a proposed restructuring deal, Mallinckrodt plans to give opioid victims a final $250 million one-time payment — a move that would leave them with $1 billion less than they were promised just last year. The proposal would also slash Mallinckrodt’s funded debt by about $1.9 billion, according to a company statement Monday.
The firm said it expects to complete the court-supervised process in the fourth quarter and that is continuing to operate as normal. Mallinckrodt intends to pay vendors and suppliers in full in ordinary course, including for any pre-petition amounts owed at the time of the Chapter 11 filing.
“We expect to complete this process on an expedited basis and emerge as a stronger organization,” said Chief Executive Officer Siggi Olafsson.
Mallinckrodt first went bankrupt in October 2020, overwhelmed by costly litigation tied to its role in the opioid crisis.
–With assistance from Jonathan Randles.
(Updates throughout with details from company statement.)
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