Mallinckrodt  (MNK) – Get Report, which makes opioids and other drugs, is reportedly close to a deal to hand majority ownership to its unsecured-bond holders as part of a bankruptcy filing.

Shares of the U.K. biopharmaceutical company at last check were off 19% at 88 cents.

The bonds would be traded for most of Mallinckrodt’s equity and some new debt, and the debt of higher-ranked lenders would be reinstated or replaced by new securities that fully cover their claims, Bloomberg reported, citing people with knowledge of the plan.

The lenders and opioid claimants would be included in the agreement, the people said. Mallinckrodt did not immediately respond to a request for comment.

Debtwire reported earlier on negotiations to give the bondholders equity and new debt. Most of the company’s unsecured debt trades at about a quarter of its original value.

Mallinckrodt would become the third major opioid producer to file for bankruptcy, Bloomberg noted.

Companies have faced off against thousands of plaintiffs from states, cities and counties that blame drugmakers and distributors for the epidemic of overdose deaths.

The Centers for Disease Control estimates that every day in the U.S. 130 people die from an opioid-related drug overdose.

Purdue Pharma, which entered Chapter 11 protection last year, has proposed a $10 billion settlement of existing claims. Insys Therapeutics filed under the bankruptcy laws earlier in 2019.

Mallinckrodt hired restructuring advisers late last year, and management disclosed in February it was pursuing court protection. 

The plan at that time was to settle its opioid claims by putting a small part of the company into bankruptcy, but it failed to gain required support from lenders.

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