Mallinckrodt Inks RSA To Initiate Voluntary Prepackaged Chapter 11 Proceedings

(RTTNews) - Specialty pharmaceutical company Mallinckrodt plc (MNK) announced Wednesday it has entered into a Restructuring Support Agreement or RSA, 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.

The plan 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.

The Company expects to complete the contemplated prepackaged Chapter 11 process in the fourth quarter of 2023 due to the overwhelming support of its key stakeholders.

Mallinckrodt is operating normally, supporting patients with high-quality therapies, serving customers and working with its business partners during this process. Employees are also expected to continue receiving their pay and benefits without interruption.

In connection with the contemplated Chapter 11 filing, Mallinckrodt also intends to make certain filings to commence Examinership Proceedings in Ireland, which are required to implement certain Irish law aspects of the financial restructuring plan and allow for emergence.