Drugmaker Mallinckrodt Looks to Bankruptcy , to Avoid Opioid-Related Payouts.
Sources claim that Mallinckrodt's board is in negotiations with a group of hedge funds to hand over control of the business through filing for bankruptcy, Fox News reports.
Those hedge funds reportedly include Greenwich and Silver Point Capital.
The 'Wall Street Journal' was the first to report on the deal on July 26.
The drugmaker has proposed to write off approximately $1 billion of the amount it still owes to addiction victims, as well as state and local governments.
According to the 'WSJ' report, Mallinckrodt will also make a one-time payment of around $250 million, citing sources familiar with the deal.
News of the potential agreement sent shares in the drugmaker up 53.3% in afternoon trading.
The drugmaker, one of the largest manufacturers of opioids, previously filed for bankruptcy three years ago.
After reaching a $1.7 billion settlement as part of that bankruptcy reorganization, the opioid producer emerged from Chapter 11 in 2022.
Fox News reports that the company first announced the possibility of a second bankruptcy in June amid concerns over $200 million in opioid-related payments
