Mallinckrodt entered into forbearance agreements with holders of certain notes

In a regulatory filing, Mallinckrodt stated: “As previously disclosed, the Board of Directors of Mallinckrodt plc is engaged in discussions with various stakeholders, including parties holding substantial positions across the company’s capital structure and representatives of the Opioid Master Disbursement Trust II. As previously disclosed, the company previously determined not to make interest payments that were due that date on its (i) 11.500% First Lien Senior Secured Notes due 2028 and (ii) 10.000% Second Lien Senior Secured Notes due 2029. As previously disclosed, the failure to make the interest payments due on June 15, 2023 under each series of notes would constitute an event of default for such series if such failure continues unremedied for a period of 30 days. As described below, on July 16, 2023, the company and/or certain of its subsidiaries entered into certain forbearance agreements pursuant to which the applicable creditors party thereto have agreed to forbear from exercising any rights or remedies with respect to the events of default arising from the company’s failure to make interest payments due on the Notes until August 15, 2023, unless the applicable forbearance agreement is earlier terminated in accordance with its terms. In addition, as described in Item 8.01, the Opioid Trust has agreed to extend the due date for the $200M payment due to it until August 15, 2023. On July 16, 2023, certain subsidiaries of the company entered into forbearance agreements with the holders of (i) more than 75% in principal amount of the outstanding 2028 First Lien Notes and (ii) a majority in principal amount of the outstanding 2029 Second Lien Notes, pursuant to which such noteholders agreed to forbear from exercising any rights and remedies (including any right to accelerate any obligations thereunder) with respect to the events of default arising from such failure (and certain related events of default) until August 15, 2023 unless such forbearance agreements (which contain customary termination events) are earlier terminated in accordance with the terms thereof. The occurrence of such events of default, unless cured promptly or unless the 2028 First Lien Notes and the 2029 Second Lien Notes are discharged, prepaid or repaid, would also constitute an event of default under the Company’s first lien senior secured term loan credit facility. Also on July 16, 2023, the Company and certain of its subsidiaries entered into a forbearance agreement with the holders of more than 50% of the loans outstanding under such credit facility and Acquiom Agency Services LLC and Seaport Loan Products LLC, as co-administrative agents thereunder, pursuant to which such lenders and the Administrative Agent agreed to forbear from exercising (and such lenders agreed to instruct the Administrative Agent and the applicable collateral agents) not to exercise any rights and remedies (including any right to accelerate any obligations thereunder) with respect to the event of default arising from such failure (and certain related events of default) until August 15, 2023, unless the Credit Agreement Forbearance Agreement (which contains customary termination events) is earlier terminated in accordance with the terms thereof.”