(Reuters) – Mallinckrodt Plc filed for Chapter 11 bankruptcy protection on Monday in the face of lawsuits alleging it fueled the U.S. opioid epidemic and after it lost a court battle to avoid paying higher rebates to state Medicaid programs for its top-selling drug.
The company listed both assets and liabilities in the range of $1 billion to $10 billion, according to a filing with the U.S. Bankruptcy Court for the District Of Delaware.
Mallinckrodt said in February it planned to have its generic drug business file for bankruptcy as part of a tentative $1.6 billion opioid settlement resolving claims by state attorneys general and U.S. cities and counties.
It further warned on Aug. 4 that the parent company and other units may also file for Chapter 11 protection after a judge allowed the federal government to force it to pay higher rebates to state Medicaid programs for its multiple-sclerosis drug H.P. Acthar Gel.
More than 3,000 lawsuits have been filed accusing drug manufacturers of engaging in deceptive marketing that promoted the use of addictive painkillers, fueling an epidemic that since 1999 has resulted in more than 450,000 overdose deaths.
Mallinckrodt said on Monday it intends to use the Chapter 11 process to implement a restructuring support agreement that would provide for an amended proposed opioid claims settlement and a financial restructuring.
The drugmaker said the company and all of its subsidiaries would continue to operate as normal.
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