Mallinckrodt starts examinership proceedings in Ireland

By Sarah Lizee

Olympia, Wash., Feb. 15 – Mallinckrodt plc began examinership proceedings in Ireland on Monday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the U.S. court confirmed the company’s Chapter 11 plan of reorganization earlier this month. Following the confirmation, the directors of Mallinckrodt planned to make filings to start the examinership proceedings, 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.

Plan terms

As contemplated by a restructuring agreement, the plan, which aims to reduce the company’s total debt by around $1.3 billion, 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.

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.

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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