Mallinckrodt plc received approvals from the U.S. Bankruptcy Court for the District of Delaware for its "First Day" motions related to the Company's voluntary Chapter 11 petitions filed on August 28, 2023.
As expected, the Court granted Mallinckrodt approval to access $150 million of the $250 million of commitments for new financing it received from certain of its creditors, as well as new borrowing availability from lenders under its asset-based loans. The approvals granted by the Court also enable the Company to continue paying employee wages, salaries and benefits without interruption and to continue paying vendors and suppliers in the ordinary course, including for any pre-petition amounts owed at the time of filing.
Siggi Olafsson, President and Chief Executive Officer of Mallinckrodt, said, "We are pleased to have received prompt approval of these First Day motions, which will enable us to continue operating normally, supporting patients with high-quality therapies, serving customers and working with our business partners. I would also like to thank our customers, vendors, suppliers and other stakeholders for their continued partnership as well as the entire Mallinckrodt team for their continued commitment."
Mr. Olafsson continued, "With the overwhelming support of our key stakeholders, we expect Mallinckrodt will emerge from this process on an expedited basis with additional financial flexibility and well-positioned to advance our business priorities and deliver high-quality therapies to our customers and patients."
As previously announced, Mallinckrodt entered into a Restructuring Support Agreement with holders of approximately 90% of each of the Company's first and second lien debt and the Opioid Master Disbursement Trust II on the terms of a comprehensive financial restructuring plan. Implementing the financial restructuring contemplated by the RSA will reduce the Company's total funded debt by approximately $1.9 billion, increase free cash flow generation, extend maturity runway and better position the business for long-term success.
Previously featured on ABL Advisor:
Mallinckrodt Initiates Voluntary Prepackaged Chapter 11 Proceedings