Disaster-prone Mallinckrodt files for bankruptcy

With its shares near worthless, the company billions of dollars in debt and lurching from one bad news update to the next, Mallinckrodt (NYSE: MNK) has voluntarily initiated Chapter 11 proceedings in the US Bankruptcy Court for the District of Delaware.

It is hoped that this will allow the drugmaker to reduce its total debt by approximately $1.3 billion, improving its financial position and better positioning it for long-term growth, resolve opioid-related claims against the company, its subsidiaries and related entities, and resolve various Acthar Gel-(repository corticotropin injection) related legal matters, including a CMS Medicaid rebate dispute.

Mark Trudeau, president and chief executive of Mallinckrodt, said: "After many months of deliberation, negotiation and consideration of alternatives, Mallinckrodt's management and board of directors determined that implementing a Chapter 11 restructuring provides the best opportunity to maximize the value of the enterprise and position the company for the future in light of the current challenges it faces.