Pharmaceutical company Mallinckrodt PLC on Thursday won court approval of its reorganization plan, which includes a $1.7 billion settlement of opioid-related litigation, bringing its 16-month bankruptcy close to an end, Reuters reported. Bankruptcy Judge John Dorsey in Wilmington, Del., signed off on the plan in a 103-page written decision. In addition to settling thousands of lawsuits accusing it of deceptively marketing its opioids, the plan allows Mallinckrodt to reduce $5.3 billion in debt by $1.3 billion and hands control of the reorganized company to creditors. Mallinckrodt filed for bankruptcy in October 2020 to resolve more than 3,000 lawsuits from states, local governments and private individuals who accused the company of fueling the opioid epidemic through deceptive marketing, including by playing down the risks of addiction and abuse. The company won the support of committees representing junior creditors and opioid claimants, which had long opposed the plan, for the deal in September. Nearly all U.S. states backed it as well. In approving the plan, Judge Dorsey overruled objections raised by the state of Rhode Island, pharmaceutical company Sanofi, certain insurers and shareholders.
