Drugmaker Mallinckrodt PLC said on Tuesday that it reached a settlement worth more than $1.6 billion with 47 states and U.S. territories and lawyers representing thousands of local governments to settle liabilities stemming from the opioid addiction crisis, WSJ Pro Bankruptcy reported. Under the settlement proposal, state and local governments would receive $1.6 billion of payments, phased out over eight years, and warrants for a minority stake in the company. Mallinckrodt’s generics subsidiaries would file for chapter 11 to implement the proposed deal, though the Ireland-based parent will stay out of bankruptcy. If approved in bankruptcy court, the settlement would bring closure to Mallinckrodt’s share of thousands of lawsuits filed against the company by cities, counties and Native American tribes surrounding the public costs of opioid abuse. The settlement eliminates the possibility of a bankruptcy filing by Mallinckrodt itself, which had been a concern among market investors, J.P. Morgan Chase & Co. analyst Chris Schott said in a research note yesterday.
