Mallinckrodt to file for Chapter 11 bankruptcy again
Mallinckrodt, a global specialty pharmaceutical company, today announced it has entered into a Restructuring Support Agreement with a substantial majority of each of the company's first and second lien debtholders and the Opioid Master Disbursement Trust II on the terms of a comprehensive financial restructuring plan that will reduce the company's total funded debt by approximately $1.9 billion, increase free cash flow generation, extend maturity runway and better position the business for long-term success.
The RSA also provides for, among other consideration, a final payment of $250 million to the Trust, in addition to the $450 million previously paid, to support the Trust's mission to address the U.S. opioid crisis and fund addiction treatment.
To implement the financial restructuring plan contemplated by the RSA, the company intends to initiate voluntary prepackaged Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware in the coming days. Due to the overwhelming support of its key stakeholders, the company expects to complete the contemplated prepackaged Chapter 11 process in the fourth quarter of 2023.
[Read more: Mallinckrodt files for bankruptcy]
Mallinckrodt said it is operating normally, supporting patients with high-quality therapies, serving customers and working with its business partners, and it fully expects to continue doing so throughout the contemplated court-supervised process. Additionally, the company's Specialty Generics business will continue to abide by previously agreed upon compliance and monitoring measures. The company said it also fully intends to continue supporting patient groups and patient advocacy programs, including through its Patient Advocacy Advisory Board and patient assistance programs.
"After several months of constructive discussions, we are pleased to have reached this agreement with our key stakeholders, which will enable Mallinckrodt to better align our balance sheet with our current business plan," said Siggi Olafsson, president and CEO of Mallinckrodt. "While we have made important progress over the past year, the steps we are taking now will strengthen our ability to navigate the challenges that have affected our business. As we move forward, we remain focused on advancing our business priorities and operational initiatives, including seeking growth opportunities across our portfolio and executing on our recent and planned product launches. Delivering therapies that improve outcomes for patients with severe and critical conditions remains at the center of all that we do."
[Read more: Mallinckrodt expected to emerge from Chapter 11 bankruptcy]
Olafsson continued, "We appreciate the constructive engagement with our creditors in determining the best path forward for the business and our patients, customers, partners and employees. We also recognize the important role of the Trust in helping to address the U.S. opioid crisis and have remained committed to ensuring that we achieved a meaningful resolution for the Trust through this process. We also thank our patients, customers and partners for their continued support, and we are grateful to our employees for their ongoing hard work and commitment to the patients we serve. We expect to complete this process on an expedited basis, well-positioned to continue delivering high-quality therapies."