Mallinckrodt plan of reorganization confirmed by U.S.; now to Ireland

Chicago, Feb. 3 – Mallinckrodt plc announced that its plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the District of Delaware, according to a press release.

The plan will reduce the company’s total debt by around $1.3 billion.

As contemplated by the restructuring agreement, the plan includes key legal settlements that resolve opioid claims brought against the company and litigation matters involving Acthar Gel, among other claims, and provides for the partial equitization of the company’s guaranteed notes.

The plan will not only improve the company’s financial position, but will also resolve numerous lawsuits the company was facing before the Chapter 11 proceedings by channeling opioid claims and many other general unsecured claims to various creditor trusts.

The plan was broadly supported by key financial, legal and other stakeholders, including:

• Holders of a substantial majority of the company's guaranteed unsecured notes;

• Holders of a substantial majority of the company's first-lien term loans;

• Holders of a substantial majority of the company's second-lien notes;

• 50 states and territories and the plaintiffs' executive committee in the opioid multidistrict litigation;

• The multi-state governmental entities group, which represents more than 1,300 counties, municipalities, tribes and other governmental entities, across 38 states and territories, with opioid-related litigation against the company;

• Certain trade creditors;

• The official committee of unsecured creditors;

• The official committee of opioid related creditors; and

• The future claims representative.

In the coming days, the directors of Mallinckrodt intend to make filings to start examinership proceedings in Ireland, which are required to implement certain Irish law aspects of the reorganization and allow for emergence.

The company expects the Irish examinership proceedings to take approximately 100 days. Mallinckrodt expects to formally emerge from Chapter 11 in the first half of 2022, following the completion of the examinership proceedings and once all conditions of the plan are effective. Until that time, the company remains under the U.S. bankruptcy court's jurisdiction.

In connection with the court's confirmation of the plan, the Company has also announced prospective appointments to the board of directors of the reorganized company upon emergence. These expected appointments include Paul Bisaro as chairman; James Sulat, who is expected to chair the audit committee; Daniel Celentano; and Neal Goldman. These individuals were identified by the company's equitizing unsecured noteholders.

Latham & Watkins LLP; Wachtell, Lipton, Rosen & Katz; Arnold & Porter; Ropes & Gray LLP; and Hogan Lovells are serving as counsel. Guggenheim Securities, LLC is serving as investment banker and AlixPartners LLP is serving as restructuring adviser to Mallinckrodt.

The company had a 120-day extension to file and solicit votes on the plan, through March 8. The solicitation period was set in late November to end May 10.

Dublin-based Mallinckrodt develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. The company filed Chapter 11 bankruptcy on Oct. 12, 2020 under case number 20-12522.

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