Mallinckrodt considering bankruptcy

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Mallinckrodt is considering filing for Chapter 11 bankruptcy protection to address its opioid related liabilities and corporate debts, The Wall Street Journal reported. 

The Chapter 11 filing would cover the parent company and most of its subsidiaries. 

A bankruptcy filing wasn't part of a settlement framework the drugmaker released in February to resolve liabilities from its alleged role in the opioid crisis. Under that settlement, Mallinckrodt had agreed to place its generic drug subsidiary into Chapter 11 bankruptcy but keep the parent company out of it, according to the Journal

Avoiding putting the parent company into bankruptcy was a key part of the settlement arrangement, as it included giving state governments warrants for a minority stake in the company. 

Mallinckrodt has not decided on whether it will file for bankruptcy, the Journal reported. 

The drugmaker has about $5.2 billion in debt. It said Aug. 4 that it had an 80 percent decline in sales last quarter compared to the year before because of litigation charges and lower demand during the COVID-19 pandemic. 

Read the full article here.

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