Buxton Helmsley eyes realignment of Mallinckrodt board, management

By Sarah Lizee

Olympia, Wash., Jan. 15 – Buxton Helmsley Group, Inc. is seeking to change Mallinckrodt plc’s board and management, which have “entirely abandoned shareholder interests,” the firm said in a press release issued Friday.

The investment adviser, which said its clients have “significant and increasing” holdings of Mallinckrodt, claims the company is attempting to push through a Chapter 11 restructuring plan that will “extinguish all shareholder interests, unnecessarily turn all shareholder equity over to a handful of bondholders, and enrich management with a 10% allocation of the reorganized company when they currently own less than 0.03% of the existing company.”

The firm is calling to remove all directors and officers not in compliance with corporate governance requirements and is proposing the appointment of new company and board management, including chairman of the board, chief executive officer and chief financial officer. The firm said these may be interim positions until a more long-term plan can be formulated.

“We've made numerous attempts to contact company management and the board of directors, requesting that the company make immediate and significant board and management changes due to management's refusal to respond to shareholder inquiries, including offerings of financing opportunities by shareholders whom I personally know,” Alexander Parker, senior managing director of Buxton Helmsley, said in the release.

Parker said the company admitted at the Dec. 16 equity committee appointment hearing that it had not attempted numerous paths to preserve shareholder equity, and there has been no attempt by the board to sell the company.

“Management has made it very clear that they chose the restructuring plans that enrich themselves with a 10% allocation of the post-reorganization entity, and not only started the negotiations for shareholders at zero but admitted to being on the side of creditors from the get-go,” Parker said.

“They claim the company is insolvent without having proved it in any way, shape, or form. It is very clear the shareholders are no longer being represented; that is a mere fact the company told the shareholders at that hearing.”

Dublin-based Mallinckrodt develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. The company filed Chapter 11 bankruptcy on Oct. 12 under case number 20-12522.

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