Mallinckrodt, a pharmaceutical company, is in talks with hedge funders about declaring bankruptcy and skipping payments meant to aid opioid addicts.
The company's shares increased by 53.3% to 69 cents. According to the story, which cited people involved with the conversations, Mallinckrodt would propose, as part of a planned arrangement, to write off almost $1 billion from what it still owes to addiction sufferers and state and local governments while making a one-time payment of approximately $250 million.
Mallinckrodt did not respond to the inquiry from the press reporters. According to persons familiar with the talks, a group of hedge funds, including Greenwich and Silver Point Capital, are negotiating with Mallinckrodt's board to give them control of the company through a bankruptcy petition.
One of the biggest opiate producers, Mallinckrodt, filed for bankruptcy protection over three years ago. It exited Chapter 11 last year after reaching a $1.7 billion countrywide settlement as part of its bankruptcy reorganization plan.
Following worries from its lenders over the $200 million payment tied to opioid-related lawsuits, the firm said in June that it was exploring a second bankruptcy petition as well as other options.
Some many cities and counties are about to receive huge amounts of funds from Mallinckrodt over opioid crisis. Some of them are Kansas, Washington and New York, awaiting $6 million, $18 million and &58.5 million, respectively.
