Mallinckrodt Executive Bonuses Add to Bankruptcy Warning Signal

Mallinckrodt Plc plans to pay more than $4.2 million in bonuses to retain top executives, as the drugmaker looks to avoid bankruptcy and settle more than 2,500 state and local government lawsuits over its handling of opioid painkillers.

The St. Louis-based drug distributor said in a Nov. 5 securities filing that it, or one of its units, may have to restructure the company’s “obligations in a bankruptcy proceeding” if a global deal can’t be reached to wipe out all opioid liability.

In a separate filing the same day, Mallinckrodt said it agreed to pay retention bonuses to its top executives, ...