Mallinckrodt Plc, a maker of opioids and other drugs, is nearing a deal to hand majority ownership to its unsecured bondholders as part of a bankruptcy filing, Bloomberg reported. The bonds would be traded for most of Mallinckrodt’s equity and some new debt, and the debt of higher-ranked lenders would be reinstated or replaced by new securities that fully cover their claims. The lenders and opioid claimants would be included in the agreement. Debtwire reported earlier on that there were negotiations to give the bondholders equity and new debt. Most of the company’s unsecured debt trades at about a quarter of its original value. Mallinckrodt would become the third major opioid producer to file for bankruptcy, amid an addiction crisis that kills more than 100 Americans daily. The companies are facing off against thousands of plaintiffs from states, cities and counties that blame drug makers and distributors for the epidemic of overdose deaths.
