Mallinckrodt considers stakeholder push for Chapter 11 filing, alternatives

Chicago, June 5 – Mallinckrodt plc announced the company is considering filing for Chapter 11 bankruptcy (again), according to an 8-K filing with the Securities and Exchange Commission.

The company is in receipt of letters from holders and lenders representing substantial holdings across the company’s capital structure, including holders of the company’s term loans due 2027 issued under a credit agreement on June 16, 2022, holders of the first-lien senior secured notes due 2025, holders of the 11˝% first-lien senior secured notes due 2028, holders of the 10% second-lien notes due 2025 and holders of the 10% second-lien senior secured notes due 2029.

Mallinckrodt has a $200 million payment due for the company’s opioid settlement on June 16.

The holders are encouraging the company’s board of directors and management team to evaluate the company’s financial wherewithal and consider options to making the payment.

Some holders are recommending a Chapter 11 filing and a potential sale of assets, and some holders are recommending transactions that would not involve such a filing.

The company has already approached the Opioid Master Disbursement Trust II about alternatives to the payment structure for the opioid settlement.

The trust is not receptive to those alternatives and sent a letter to the company demanding timely payment and threatening action against the company, its officers and directors.

The board directed management and the company’s advisers to continue analyzing proposals, including a potential filing in the near term or later under the U.S. bankruptcy code.

Mallinckrodt is a Dublin-based developer, manufacturer, marketer and distributor of specialty pharmaceutical products and therapies.

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