Avaya files for Chapter 11, surges; Paragon falters on agreement; Mallinckrodt rebounds

By Colin Hanner

Chicago, Jan. 19 – Several distressed names saw some uncharacteristically wide movement on Thursday, spurred mostly by company-specific announcements driving activity.

Most notably, telecommunication and technology company Avaya Inc. filed for Chapter 11 bankruptcy protection and released its fourth quarter results on Thursday, prompting a surge in several of the day’s most active issues.

Late Wednesday, offshore driller Paragon Offshore plc announced it had reached an agreement in principle for a new plan of reorganization with two committees that hold two terms of debt, leading to a sudden drop off in one of its securities.

Fellow offshore driller Transocean Ltd. followed with losses of its own, though Pacific Drilling saw quite the opposite from the previous two with modest gains coming in two sets of notes.

One of Mallinckrodt Pharmaceuticals’ notes surged a day after the England-based company paid out a settlement to the Federal Trade Commission on claims of price-gouging in one of its drugs.

Traditional retailers continued to find trouble on the session, including Neiman Marcus Group, Inc. and Claire’s Stores, Inc.

And hospital operator Community Health Systems, Inc. and pharmaceutical company Endo Finance Co. were down on the session.

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