A New Jersey drugmaker ensnared in the fallout from America’s opioid crisis is seeking bankruptcy protection

A New Jersey drugmaker ensnared in the fallout from America’s opioid crisis is seeking bankruptcy protection.

Mallinckrodt said Monday that it had begun Chapter 11 proceedings to restructure debt and resolve “several billion dollars of otherwise unmanageable potential legal liabilities.”

The drugmaker, one of the highest-volume opioid producers in the U.S. at the height of the nation’s prescription drug crisis, announced in February a tentative $1.6 billion settlement to avert hundreds of lawsuits. It said Monday that it plans to amend the settlement as it restructures.

Under the proposed settlement, opioid claims would be channeled to trusts that receive $1.6 billion in structured payments. Claimants also would receive warrants for about 20% of the company’s fully diluted outstanding shares, the company said Monday.

A court-appointed committee representing thousands of plaintiffs in the opioid lawsuits will recommend support for the amended agreement, Mallinckrodt said.

The company did not immediately respond early Monday to inquiries about whether the amended deal affects the amounts individual plaintiffs may receive.

Trading in company shares, which dipped under $1 for the first time this month as investors bailed out, were halted at the opening bell Monday. The stock went for well over $100 just over five years ago.

Mallinckrodt’s path through the bankruptcy courts follows that of Purdue Pharma, the maker of OxyContin, last year.

Mallinckrodt plans to slash its debt by about $1.3 billion and it will continue to operate during the process.

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Oasis Petroleum  (OAS) – Get Report shares slumped after the oil-and-gas fracking-services provider said it filed under Chapter 11 of U.S. bankruptcy law.

The stock recently traded at 21.67 cents, down 49%. It has lost 93% of its value this year.

“Due to historically low global energy demand and commodity prices, we determined that it is best for Oasis Petroleum to take decisive action to strengthen our liquidity and overcome the headwinds now challenging both our company and industry,” the Houston company’s chief executive, Thomas Nusz, said in a statement.

The company said it filed the Chapter 11 petition in U.S. Bankruptcy Court for the Southern District of Texas.

Oasis has entered a restructuring-support agreement with substantially all its lenders on its revolving-credit facility and holders of 52% of the face amount of its bonds regarding a comprehensive prepackaged restructuring, Oasis said in a statement.

Its lenders have committed $450 million of debtor-in-possession financing.

“Through this financial restructuring, Oasis Petroleum intends to reduce its total indebtedness by $1.8 billion, representing 100% of its senior unsecured notes and senior unsecured convertible notes,” it said. 

When it leaves Chapter 11, Oasis said, it expects to have $340 million of borrowings under its credit facility. 

It expects to complete an accelerated restructuring process and exit Chapter 11 in November, subject to the bankruptcy court’s approval.

Oasis Midstream Partners MLP  (OMP) – Get Report isn’t included in the bankruptcy proceedings.

The coronavirus pandemic and the plunge in energy demand and prices this year hammered most energy companies. 

A number of other energy companies have filed for protection from creditors in Chapter 11.

“We remain committed to the highest standards” related to “environmental stewardship, safety and operational excellence,” CEO Nusz said. 

“We expect to continue our operations as normal.”