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Opioid maker Mallinckrodt Plc filed a plan of reorganization Tuesday that has the support of opioid litigation claimants, holders of 84% in principal amount of unsecured notes and an undisclosed portion of term loan holders, according to court filings, Bloomberg News reported. The plan provides for the company’s revolving credit facility to be paid in full in cash. First- and second-lien term lenders would either be repaid in cash or with new takeback term loans plus cash for accrued interest and other payments, depending on the allowance of each group’s make-whole claims at the time of confirmation. Unsecured noteholders would receive a pro rata share of the takeback second-lien notes and equity shares in the reorganized company. The disclosure statement stipulates that the ad hoc group of unsecured noteholders hasn’t yet approved the language allocating takeback loans to the first- and second-lien holders. Opioid litigation claims would be channeled into a trust set aside for their settlement and payment. The company has previously said it would total $1.6 billion in structured payments. Mallinckrodt was the third major opioid maker to go under after being swamped by lawsuits alleging it profited by fueling the U.S. opioid epidemic.

Members of the Sackler family who own bankrupt OxyContin-maker Purdue Pharma LP are worth approximately $11 billion, documents released yesterday by a congressional committee show, the Wall Street Journal reported. Members of the Sackler family have agreed to pay $4.28 billion over the next decade as part of a proposal for Purdue to exit bankruptcy and settle thousands of lawsuits filed by states, local governments and individuals blaming the company and its owners for helping fuel the nation’s opioid crisis. Summaries of the family wealth, turned over to Rep. Carolyn Maloney (D-N.Y.), also were seen by Purdue’s creditors during settlement talks, according to representatives for the two branches of the company’s family owners. A third branch of the family is no longer involved in Purdue Pharma and wasn’t included in Tuesday’s release by Rep. Maloney, who chairs the House Committee on Oversight and Reform. The documents show the Sacklers’ wealth includes more than $950 million in cash, more than $1 billion in real estate, another $1 billion in private-equity investments and $250 million in art, jewelry and other collectibles. The family owns stakes worth more than $1 billion in international drug companies, which are expected to be sold to help pay back creditors. The documents show much of the family’s wealth is held in dozens of trusts. A spokesman for the descendants of the late Mortimer Sackler said no party in the bankruptcy has challenged the accuracy or completeness of the wealth disclosure and that “we hope the focus will now be on concluding a resolution that will deliver timely resources to individuals, families and communities in need.”

A bankrupt unit of nursing-home operator Consulate Health Care won court approval to put itself up for sale, along with the rights to try to collect on a $258 million whistleblower judgment against its other nonbankrupt corporate affiliates, WSJ Pro Bankruptcy reported. CMC II LLC, a back-office manager for Consulate-run nursing homes, filed for bankruptcy last month along with two affiliated nursing homes, saying they couldn’t pay a $258 million judgment they faced for overbilling government health programs. CMC is now seeking to sell itself out of bankruptcy, and has named a Consulate affiliate as the lead bidder after it offered $3 million. The assets up for sale include CMC’s legal rights to seek compensation from its solvent corporate affiliates over the judgment that bankrupted it. Litigation financiers have expressed interest in purchasing the legal claims, according to testimony by CMC’s top restructuring officer. Lawyers for unsecured creditors, including the whistleblower who won the judgment, Angela Ruckh, are wary of the legal claims ending up in the hands of the lead bidder. In court hearings on Thursday and Friday, they said that putting CMC in the hands of a Consulate affiliate that has not filed for bankruptcy would simply bury the judgment, which could otherwise be asserted against other Consulate units. By Friday, the only concession won by Ms. Ruckh and other unsecured creditors was a two-month delay in the sale deadline, from May to July.

Only 16 months after Tower Health and Drexel University bought St. Christopher’s Hospital for Children out of bankruptcy, the future of the North Philadelphia safety net institution again hangs in the balance as Tower races to improve its finances or sell hospitals before it runs out of cash, the Philadelphia Inquirer reported. Pressure has mounted to the point that Drexel University president John Fry resigned this month from the Tower board to avoid conflicts of interest as he looks for a way to maintain St. Chris as a crucial teaching location for the Drexel College of Medicine’s third- and fourth-year students. It’s not clear whether a resolution is near, but Temple University Health System, which also uses St. Chris as a teaching location, is also in the mix to run the hospital. “Preserving St. Chris is important for Philadelphia, because it plays a vital role in the city’s health-care network for children. We are currently in discussions to see whether it’s possible for Temple to have a role in doing so,” Temple Health’s chief executive, Mike Young, said Monday. About the time of the St. Chris sale, which was completed in December 2019, executives at Children’s Hospital of Philadelphia expressed a willingness to assist St. Chris’ new owners if asked. It’s not clear whether that ever happened.

CVS Health Corp., Walgreens Boots Alliance and other pharmacy chains face mounting pressure to settle thousands of government lawsuits over their role in the U.S. opioid epidemic, after a federal judge warned the companies they risk financial peril, Bloomberg News reported. As drug makers and distributors work to resolve similar complaints, mediation has failed with pharmacies, which are accused of ignoring red flags about suspicious painkiller prescriptions. The first trials are set to start this year, and a judge on Wednesday may expand the number of early cases going before juries to help gauge the potential cost of settling all the cases. If pharmacy owners, including Walmart Inc. and Rite Aid Corp., “want to hemorrhage money trying cases all over the country, they have a legal right to do it until they drop, go bankrupt or win them all,” U.S. District Judge Dan Polster, who is overseeing all the opioid cases, said at a hearing March 10. “No other defendant is operating that way.” Judge Polster’s admonishment comes as the rest of the opioid industry seeks to resolve claims filed by local and state governments, including a $26 billion accord by Johnson & Johnson, AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp. Purdue Pharma LP proposed a $10 billion settlement as part of its bankruptcy. McKinsey & Co., which advised the industry on ways to boost opioid sales, reached a $641.5 million deal with states last month.

Mercy Hospital and Medical Center has finalized a deal to sell its facility for $1 to a Michigan-based not-for-profit, in a deal that promises to keep the Bronzeville hospital open after months of uncertainty regarding its future, the Chicago Sun-Times reported. The agreement between Mercy and Insight Chicago requires Insight to continue operating the safety net hospital as a full-service community acute-care facility in exchange for ownership of the building, its equipment and parking facilities, the companies announced in a joint statement Saturday. Insight has promised to offer an emergency department, rehabilitation center, stroke programs, behavioral health assistance, an obstetrics unit, intensive care unit and inpatient medical surgical beds. They are also expected to maintain Mercy’s current charity care policies, company officials said. The move marks the penultimate step in a nearly yearlong saga that began when Mercy, which is owned by Trinity Health, announced plans to close their doors last July, citing millions of dollars in losses per month. The announcement sparked widespread backlash from activists who felt closing a South Side hospital in the middle of a pandemic was callous at best, especially in the middle of a pandemic that has inflicted disproportionate harm on Black and Brown people in Chicago. In February, the hospital filed for chapter 11 protection after the Illinois Health Facilities and Services Review Board rejected their application to close, and its future was up in the air until the board reluctantly approved its sale to Insight Chicago in late March.

Health-care companies are taking on more debt to pay dividends to their private equity owners, just a year after the start of a pandemic that plunged the industry into crisis, Bloomberg News reported. At least five U.S. health-care firms have borrowed heavily in part to fund hundreds of millions of dollars of such payouts in the first quarter, according to a report to be released on Wednesday by the nonprofit Private Equity Stakeholder Project. The practice, known as dividend recapitalization, is gaining steam as investors hunt for yield with interest rates near historic lows. Meanwhile, health-care companies are on a stronger footing, with patient visits rebounding and the government unleashing unprecedented economic stimulus. Health-care firms have already borrowed about $3.7 billion in 2021, partly to fund payments to private equity owners, more than double the amount issued all of last year, according to data from S&P Global Market Intelligence. At the current pace, it would be the industry’s most active year for borrowing since 2015.

Bankruptcy Judge Robert Drain extended an injunction on lawsuits against members of the Sackler family, owners of Purdue Pharma, until April 21, NPR reported. Judge Drain made the ruling yesterday from his court in White Plains, N.Y., while urging parties to move swiftly to hash out a final deal over the future of the embattled drug company. More than two dozen state attorneys general are still hoping to move forward with separate civil claims against the Sacklers, who earned more than $10.8 billion selling opioids. According to Judge Drain, however, that kind of legal scrum would "irreparably harm the ability to conclude these negotiations." He also suggested the threat of new state lawsuits against the Sacklers was a "misguided" effort to gain leverage over the family in bankruptcy talks. At issue is how Purdue Pharma and its owners will be held accountable for their role in an opioid epidemic that's killed more than 450,000 Americans. The drug-maker filed for bankruptcy in 2019, facing an avalanche of claims linked to the marketing and sale of its highly addictive painkiller Oxycontin.

McKinsey & Co. will pay $45 million to settle an investigation by Nevada of the big consulting firm’s role in fueling the U.S. opioid epidemic, Reuters reported. Nevada had been the lone holdout among U.S. states investigating McKinsey’s conduct, and Monday’s settlement boosts the firm’s payout for opioid settlements to about $641 million. McKinsey had in early February reached a $573 million settlement with 47 U.S. states, the District of Columbia and five U.S. territories, plus $23 million of settlements with Washington state and West Virginia. A McKinsey spokesman said the firm did not admit wrongdoing or liability, believes its past work was lawful and has denied contrary allegations. The settlements came after lawsuits showed how McKinsey advised drug manufacturers, including Purdue Pharma, which makes OxyContin, on how to market opioids, including by targeting high-volume prescribers.

Chicago community leaders sought to delay the planned sale of Mercy Hospital and Medical Center to biomedical company Insight, using a virtual state hearing to urge a sale to a partnership formed by a Black physicians’ group and a local hospital, Bloomberg News reported. State representative Lamont Robinson asked the Illinois Health Facilities & Services Review Board to allow a sale to the physicians and Humboldt Park Health, formerly known as Norwegian American Hospital. Humboldt’s population has similar needs and its CEO has transformed it, said Robinson, who represents Mercy’s district. “We need a local organization that understands our community,” he said. At issue is the survival and ownership of Mercy, which filed for bankruptcy last month after the state rejected its plans to shutter. Owner Trinity Health Corp. agreed to sell the facility for $1 to Insight. Alderman Sophia King said that there are a number of interested buyers including local hospitals. Community leaders said they’d met with some prospective buyers. Backers of selling to Insight included officials from the company’s Flint, Mich. hometown and some Mercy physicians, though others were opposed.