The plot thickens as, upon this plan’s fruition, Mallinckrodt’s current equity would dissolve into the annals of history, with its phoenix-like rebirth in the form of new shares earmarked for its creditors.
Signals From the Past
Whispers of Mallinckrodt’s potential reentry into the bankruptcy arena began circulating in June. The rumblings stemmed from their contemplation of bypassing a $200 million remittance to the opioid trust, leaning instead toward fulfilling their secured debt commitments.
Revisiting History’s Pages
For those with memories stretching back to October 2020, this isn’t Mallinckrodt’s debut dance with Chapter 11. The Ireland-headquartered behemoth, flanked by its affiliates, entered the bankruptcy stage with a resolution strategy to trim its formidable $5.3 billion debt by over $1 billion. Their master plan? Channeling liabilities from their generic opioid sales towards a $1.7 billion trust and bringing closure to the looming shadow of False Claims Act lawsuits, which took issue with the company’s approach to Acthar infantile spasm drug reimbursements—to the tune of $260 million.
