This post was originally published on this site
Mallinckrodt PLC made it official Monday, with the Dublin, Ireland-based drugmaker filing for bankruptcy for the second time in three years after struggling to make settlement payments for its role in the opioid crisis.
The company also disclosed that it received a grand jury subpoena last week from the U.S. Attorney’s Office for the Western District of Virginia.
Trading in Mallinckrodt’s stock
MNK,
remained halted for news. The stock closed at a record low of 34 cents on Friday.
The subpoena is for information from July 17, 2017, to the present relating to Mallinckrodt’s reporting of “suspicious orders” for controlled substances, chargebacks and other transactions, as well as communications between the company and the U.S. Drug Enforcement Administration.
The company said it plans to cooperate with the U.S. attorney’s office investigation and to share information related to the operating injunction its specialty generics business has been operating under since October 2020.
“The company believes that Specialty Generics is in compliance with its obligations through its industry-leading compliance program for controlled substances,” Mallinckrodt said in an 8-K filing with the U.S. Securities and Exchange Commission. “The company cannot predict the eventual scope, duration or outcome of the investigation at this time.”
The bankruptcy filing, which the company indicated last week would be coming shortly, included the company, substantially all of its U.S. subsidiaries and certain international subsidiaries.
The company and subsidiaries will continue to operate their business as “debtors in possession.”
“We are moving forward with the anticipated next steps for our financial restructuring plan and appreciate the significant support of our key stakeholders to reach this milestone,” said Chief Executive Siggi Olafsson. “Implementing this agreement will meaningfully enhance Mallinckrodt’s financial foundation and better position the business for the future.”
Last week, the company said it had entered into a restructuring support agreement with debtholders and the Opioid Master Disbursement Trust II that will reduce its debt by $1.9 billion and that provides for a final payment of $250 million to the trust, in addition to the $450 million already paid.
The $700 million the company will pay to the trust compares with the $1.7 billion settlement agreement Mallinckrodt entered to resolve lawsuits related to the opioid crisis.
Mallinckrodt last filed for bankruptcy in 2020 and emerged from bankruptcy last year.
The stock has plummeted 95.6% year to date, while the S&P 500
SPX
has gained 15.5%.
