Mallinckrodt preps a possible bankruptcy amid a maelstrom of opioid claims — report
Struggling with $5 billion in debt and a maelstrom of legal claims over their alleged role in a nationwide epidemic of opioid abuse, Mallinckrodt has reportedly been consulting with lawyers and restructuring pros to see if they should restructure the company in bankruptcy.
Bloomberg reported that the biopharma company — frequently fingered as one of the worst players involved in price gouging — has hired Latham & Watkins along with AlixPartners to explore their options. And that triggered a rout as investors fled the stock $MNK, sending its shares down 44% after the bell.
There was also a domino effect, as Teva and Endo also took a nasty hit.
Purdue is already planning a bankruptcy as company execs negotiate a settlement that could reach up to $12 billion. Reuters reported that they could pull the trigger soon, which is seen as a negotiating ploy as the company faces a kick back from states over the deal. They all face hundreds of claims for their role in an epidemic that caused tens of thousands of deaths.