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DUBLIN, Feb. 3, 2022 /PRNewswire/ -- Mallinckrodt plc (OTCMKTS: MNKKQ) ("Mallinckrodt" or the "Company") today announced that its Plan of Reorganization (the "Plan") has been confirmed by the U.S. Bankruptcy Court for the District of Delaware, paving the way for the Company to begin the next stage in its reorganization process.

Mark Trudeau, President and Chief Executive Officer of Mallinckrodt, said, "We are pleased to have achieved this significant milestone in the Company's reorganization. We appreciate the broad consensus reached with key stakeholder groups for the Plan and their confidence in Mallinckrodt and our path forward. We have made important progress and are now turning to the final phases in a reorganization process designed to reduce debt, address litigation claims and position the Company for long-term success."

Trudeau continued, "I would like to extend my sincere gratitude to the Mallinckrodt team for their unwavering patience, focus and resilience throughout this process. We also appreciate the strong support of our customers, partners and other stakeholders. All of us at Mallinckrodt remain as committed as ever to developing new therapies, improving patient health outcomes and supporting underserved patients with severe and critical conditions."

Implementing the Plan and previously announced restructuring support agreement ("RSA") will significantly improve Mallinckrodt's financial position and resolve numerous lawsuits the Company was facing prior to the Chapter 11 proceedings by channeling opioid claims and many other general unsecured claims to various creditor trusts. Implementing the Plan and RSA will also enable Mallinckrodt to move forward as a better capitalized company, with material historical litigation resolved, and a renewed focus on its strategic priorities of developing and commercializing therapies that improve health outcomes.

The Plan, as contemplated by the RSA, 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 unsecured notes. The Plan strengthens the Company's balance sheet and reduces its total debt by approximately $1.3 billion.[1]

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 certain filings to commence 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, who were identified by the Company's equitizing unsecured noteholders, bring relevant industry expertise and experience to help Mallinckrodt advance its strategic vision following emergence.

Advisors
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 advisor to Mallinckrodt.

About Mallinckrodt 
Mallinckrodt is a global business consisting of multiple wholly owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The Company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. To learn more about Mallinckrodt, visit www.mallinckrodt.com.

Mallinckrodt uses its website as a channel of distribution of important company information, such as press releases, investor presentations and other financial information. It also uses its website to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the U.S. Securities and Exchange Commission (SEC) disclosing the same information. Therefore, investors should look to the Investor Relations page of the website for important and time-critical information. Visitors to the website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations page of the website.

CAUTIONARY STATEMENTS RELATED TO FORWARD-LOOKING STATEMENTS
Statements in this document that are not strictly historical, including statements regarding future financial condition and operating results, legal, economic, business, competitive and/or regulatory factors affecting Mallinckrodt's businesses, and any other statements regarding events or developments the company believes or anticipates will or may occur in the future, may be "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties.

There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things: the ability of Mallinckrodt and its subsidiaries to consummate the Plan, the effects of the Chapter 11 cases, including increased professional costs, on the liquidity, results of operations and businesses of Mallinckrodt and its subsidiaries; the consummation of the transactions contemplated by the restructuring support agreement and the Plan, including the settlements entered into with the OCC, the UCC, and Mallinckrodt's second lien noteholders and the ability of the parties to negotiate definitive agreements with respect to the matters covered by the related term sheets, whether related to such settlements, included in the restructuring support agreement, the Plan or otherwise, the occurrence of events that may give rise to a right of any of the parties to terminate the restructuring support agreement, the Plan or any of the settlements and to satisfy the other conditions of the restructuring support agreement, the Plan and the settlements, including satisfying the milestones specified in the restructuring support agreement and completion of the expected Irish examinership process; governmental investigations and inquiries, regulatory actions and lawsuits brought against Mallinckrodt by government agencies and private parties with respect to its historical commercialization of opioids, including the agreement set forth in the Plan regarding a global settlement to resolve all opioid-related claims; potential delays in Mallinckrodt's Chapter 11 process; the settlement set forth in the Plan with governmental parties to resolve certain disputes relating to Acthar Gel; the possibility that such settlement will not be consummated and the risks and uncertainties related thereto, including the time and expense of continuing to litigate this dispute and the impact of this dispute on Mallinckrodt's financial condition and expectations for performance; the ability to maintain relationships with Mallinckrodt's suppliers, customers, employees and other third parties as a result of the Chapter 11 cases; the availability of operating capital during the pendency of the Chapter 11 cases, including events that could terminate Mallinckrodt's right to continue to access the cash collateral of Mallinckrodt's lenders; the possibility that Mallinckrodt may be unable to achieve its business and strategic goals even if the Chapter 11 plan is successfully consummated; the possibility that Mallinckrodt's Chapter 11 cases may be converted into Chapter 7 cases under the bankruptcy code; the potential termination of Mallinckrodt's exclusive right to file a Chapter 11 plan; the nondischargeability of certain claims against Mallinckrodt as part of the bankruptcy process; developing, funding and executing Mallinckrodt's business plan and continuing as a going concern; Mallinckrodt's post-bankruptcy capital structure; scrutiny from governments, legislative bodies and enforcement agencies related to sales, marketing and pricing practices; pricing pressure on certain of Mallinckrodt's products due to legal changes or changes in insurers' reimbursement practices resulting from recent increased public scrutiny of healthcare and pharmaceutical costs; the impact of the outbreak of the COVID-19 coronavirus; the reimbursement practices of governmental health administration authorities, private health coverage insurers and other third-party payers; complex reporting and payment obligations under the Medicare and Medicaid rebate programs and other governmental purchasing and rebate programs; cost containment efforts of customers, purchasing groups, third-party payers and governmental organizations; changes in or failure to comply with relevant laws and regulations; Mallinckrodt's and its partners' ability to successfully develop or commercialize new products or expand commercial opportunities; Mallinckrodt's ability to navigate price fluctuations; competition; Mallinckrodt's and its partners' ability to protect intellectual property rights; limited clinical trial data for Acthar Gel; clinical studies and related regulatory processes; product liability losses and other litigation liability; material health, safety and environmental liabilities; potential indemnification liabilities to Covidien pursuant to the separation and distribution agreement; business development activities; retention of key personnel; the effectiveness of information technology infrastructure including cybersecurity and data leakage risks; customer concentration; Mallinckrodt's reliance on certain individual products that are material to its financial performance; Mallinckrodt's ability to receive procurement and production quotas granted by the U.S. Drug Enforcement Administration; complex manufacturing processes; conducting business internationally; Mallinckrodt's ability to achieve expected benefits from restructuring activities; Mallinckrodt's significant levels of intangible assets and related impairment testing; labor and employment laws and regulations; natural disasters or other catastrophic events; Mallinckrodt's substantial indebtedness and its ability to generate sufficient cash to reduce its indebtedness; Mallinckrodt's ability to generate sufficient cash to service indebtedness even after the existing indebtedness is restructured; future changes to U.S. and foreign tax laws or the impact of disputes with governmental tax authorities; and the impact of Irish laws.

These and other factors are identified and described in more detail in the "Risk Factors" section of Mallinckrodt's most recent Annual Report on Form 10-K and other filings with the SEC. The forward-looking statements made herein speak only as of the date hereof and Mallinckrodt does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.

CONTACTS

Investor Relations
Daniel J. Speciale
Global Corporate Controller & Chief Investor Relations Officer
314-654-3638
daniel.speciale@mnk.com  

Government Affairs
Mark Tyndall
Senior Vice President, U.S. General Counsel 
202-459-4141
mark.tyndall@mnk.com

Media
Michael Freitag / Aaron Palash / Aura Reinhard
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

¹ Excluding a previously disclosed 2020 excess cash flow sweep of approximately $114 million to First Lien Term Loan Lenders.

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SOURCE Mallinckrodt plc