Mallinckrodt's Opioid Resolution Through Generic Unit Bankruptcy May Be 'Test Case'

Mallinckrodt to pay $1.6bn and place its generics unit in bankruptcy under agreement in principle for US global settlement; six states are not on board, including New York, whose suit is still set to go to trial March 20.

Opioid Law Concept 3D Illustration
Mallinckrodt reaches agreement in principle with MDL plaintiffs' executive committee to resolve opioid litigation

Mallinckrodt PLC is seeking to free itself of opioid litigation by putting its generic unit into Chapter 11 bankruptcy and then paying plaintiffs $1.6bn over eight years through a trust overseen by the bankruptcy court.

A "channeling injunction" is expected to release parent Mallinckrodt from all opioid-related claims that could have been asserted against it and its subsidiaries before the bankruptcy plan becomes effective. The...

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