Financially troubled pharmaceutical company Mallinckrodt is in discussions with a compensation trust for opioid victims as it seeks to potentially reduce the amount of settlement payments by as much as $1 billion, according to people familiar with the matter, WSJ Pro Bankruptcy reported. The generic drugmaker exited bankruptcy in 2022 with a $1.7 billion settlement agreement with state and local governments and private plaintiffs, who alleged that the company played a role in fueling the opioid crisis. It paid $450 million upon emergence from chapter 11, and still owes roughly $1.2 billion. The company is exploring a range of different strategic possibilities for the remaining obligations, including possibly renegotiating the remaining amount under the settlement to roughly $200 million to $300 million, to be paid in a lump sum. Last month, Mallinckrodt delayed a $200 million payment owed to the trust, as well as missed interest payments owed to its bondholders. The company’s financial position has weakened since it exited its previous bankruptcy due to declining sales of specialty products and widening losses. The company has been in talks with financial stakeholders over restructuring proposals, some of which would involve a repeat bankruptcy filing.
