Drugmaker Mallinckrodt Looks to Bankruptcy , to Avoid Opioid-Related Payouts.
Sources claim that Mallinckrodt's board is in
negotiations with a group of hedge funds
to hand over control of the business through
filing for bankruptcy, Fox News reports.
Those hedge funds reportedly include
Greenwich and Silver Point Capital.
The 'Wall Street Journal' was the
first to report on the deal on July 26.
The drugmaker has proposed to write off approximately
$1 billion of the amount it still owes to addiction victims,
as well as state and local governments.
According to the 'WSJ' report, Mallinckrodt
will also make a one-time payment of around
$250 million, citing sources familiar with the deal.
News of the potential agreement sent shares in
the drugmaker up 53.3% in afternoon trading.
The drugmaker, one of the largest
manufacturers of opioids, previously
filed for bankruptcy three years ago.
After reaching a $1.7 billion settlement as part
of that bankruptcy reorganization, the opioid
producer emerged from Chapter 11 in 2022.
Fox News reports that the company first announced
the possibility of a second bankruptcy in June amid
concerns over $200 million in opioid-related payments