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Mallinckrodt, a pharmaceutical company (OTC: MNKKQ), announced its successful emergence from bankruptcy proceedings, revealing a substantial reduction of approximately $1.9 billion in its funded debt. This milestone, following court approval of its bankruptcy plan last month, positions Mallinckrodt with improved financial footing to pursue its strategic goals.

Under the terms of the bankruptcy plan, the company’s ownership has shifted to its lenders, resulting in the dissolution of all existing equity shares.

Initially seeking bankruptcy protection in 2020 to tackle mounting debt, legal battles regarding its generic opioid marketing practices, and disputes over drug pricing, Mallinckrodt previously underwent a settlement that addressed litigation threats and reduced $1.5 billion in debt. However, subsequent financial challenges arose due to declining sales of its key branded medications, notably Acthar Gel.

The company clarified its commitment to sustaining operations within its Specialty Generics division, overseen by an independent monitor. Additionally, Mallinckrodt affirmed its adherence to established Acthar-related settlement conditions.

Mallinckrodt’s emergence from bankruptcy signifies a pivotal moment, empowering the company to navigate its future while addressing past financial obstacles and legal complexities.