Mallinckrodt plc (NYSE American: MNK), a global specialty pharmaceutical company, has announced the initiation of voluntary prepackaged Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. This action is part of the company’s comprehensive financial restructuring plan outlined in a Restructuring Support Agreement (RSA) entered into with over 85% of the company’s first and second lien debtholders and the Opioid Master Disbursement Trust II. The process is expected to be completed in the fourth quarter of 2023
The restructuring plan aims to reduce Mallinckrodt’s total funded debt by approximately $1.9 billion, extend its maturity runway, and enhance its free cash flow generation. As part of the RSA, a final one-time payment of $250 million was made to the Trust to support efforts in addressing the U.S. opioid crisis and funding addiction treatment. Despite the Chapter 11 proceedings, the company plans to continue normal operations and maintain patient support programs.
Mallinckrodt has filed motions to ensure continued operations during the proceedings, including the payment of employee wages, salaries, and benefits. The company expects to have over $450 million in liquidity, combining cash, new financing commitments, and borrowing availability, which should sustain its operations throughout the court-supervised process.
The company’s legal advisors include Latham & Watkins LLP, Wachtell, Lipton, Rosen & Katz, Arthur Cox LLP, Richards, Layton & Finger PA, and Hogan Lovells US LLP. Guggenheim Securities, LLC is serving as the investment banker, and AlixPartners LLP is the restructuring advisor.
Mallinckrodt’s primary focus areas include autoimmune and rare diseases, specialty generics, immunotherapy, and neonatal respiratory critical care therapies.