Mallinckrodt pays half of late interest, ‘actively engaged’ in talks

Mallinckrodt entered into certain extensions to its forbearance agreements, pursuant to which the applicable creditors and agents 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. Pursuant to the extension agreement, Mallinckrodt has agreed to pay approximately $19M, plus accrued interest thereon, representing 50% of the interest payment originally due on June 15. The company expects to pay the remaining amount of such interest payment, including accrued interest thereon, in connection with signing a potential restructuring support agreement. Mallinckrodt said its board continues to actively evaluate the company’s financial situation and consider options, and that the company “is actively engaged in advanced discussions with various stakeholders.” These discussions contemplate entering into a restructuring support agreement withs various stakeholders that would include, among other things, the company’s initiating Chapter 11 proceedings. The contemplated Chapter 11 proceedings would cause the company’s ordinary shares to be canceled, which would result in no recovery for holders of its ordinary shares, it added.