Mallinckrodt Files for Second Bankruptcy; Plans $1 Billion Debt Reduction Amid Opioid Litigation

August 29, 2023

Drugmaker Mallinckrodt has filed for its second bankruptcy in the US within three years, with a restructuring plan aiming to alleviate $1 billion from its owed amount to victims of the opioid crisis. The firm began Chapter 11 proceedings following an agreement that would hand the company over to its lenders in exchange for a $1.9 billion debt reduction. This proceeding would erase existing equity shares. The New York Stock Exchange has suspended trading Mallinckrodt’s ordinary shares and launched proceedings to remove them from the exchange. The company plans to finish its second bankruptcy by Q4 2023, after which, if the restructuring is court-approved, it will possess over $450 million in liquidity, including $250 million in new credit and current cash reserves.

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[Source: Reuters, August 28th, 2023]

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