Mallinckrodt statement hearing moved again, this time to June 15

By Sarah Lizee

Olympia, Wash., June 7 – Mallinckrodt plc’s hearing on approval of the disclosure statement for its Chapter 11 plan of reorganization has been rescheduled again, this time to June 15 from June 8, according to a notice filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the statement has drawn objections from the official committee of opioid related claimants, the U.S. trustee overseeing the case, the official committee of unsecured creditors and an informal group of first-lien noteholders.

Under the plan, holders of other secured claims will be paid in full in cash, including any interest, receive the collateral securing their claims, or receive other treatment that would render the claims unimpaired.

Holders of first-lien revolving credit facility claims will be repaid in full in cash at par plus accrued interest.

Holders of 2024 and 2025 first-lien term loan claims will receive either (a) new takeback term loans plus repayment in full in cash of the first-lien term loans’ accrued interest, the 2020 ECF payment and the term loan exit payment, or (b) repayment in full in cash in an amount equal to the 2024 or 2025 first-lien term loans outstanding amount, as applicable, plus the accrued interest, the 2020 ECF payment and the term loan exit payment.

If at the time of confirmation the first- and second-lien notes make-whole claims are not allowed and the claims may be reinstated without the make-whole claims being allowed, all allowed claims will be reinstated. Otherwise, holders will receive cram-down first- or second-lien notes in a face amount equal to the amount of their claims.

Holders of guaranteed unsecured notes claims will receive their pro rata share of takeback second-lien notes and 100% of new Mallinckrodt ordinary shares, subject to dilution on account of the new opioid warrants and the management incentive plan.

Holders of general unsecured claims will receive a general unsecured claims baseline distribution, which means a pro rata share of the amount of a $100 million cash pool. The pro rata share will be calculated individually for each debtor.

Holders of trade claims will receive their pro rata share of the up to $50 million trade claim cash pool.

All state opioid claims and non-state governmental opioid claims will automatically be channeled exclusively to an opioid trust. Each state opioid claim will be resolved and receive a recovery, if any, from the governmental opioid claims share.

All other opioid claims will automatically be assumed by the opioid trust and will receive a recovery, if any, from the other opioid claims share.

Holders of settled federal/state Acthar claims will be resolved in line with the terms of settlement agreements.

No property will be distributed to the holders of allowed intercompany claims or intercompany interests.

Subordinated claims will be discharged, canceled and extinguished with no recovery or distribution.

Holders of equity interests will receive no distribution.

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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