Mallinckrodt Files Bankruptcy to Settle Pile of Opioid Suits (1)

Mallinckrodt Plc became the third major opioid maker to go bankrupt after being swamped by claims it profited by fueling the U.S. opioid epidemic.

The drug company said Monday it filed for Chapter 11 protection in Delaware after getting creditors and claimants to agree on a restructuring plan that hands ownership to bondholders, wipes out shareholders and sets aside $1.6 billion to resolve all opioid litigation. The filing also will help resolve a U.S. government probe into whether the company defrauded Medicaid by overcharging for Acthar Gel, its top-selling multiple sclerosis drug.

The move comes as Mallinckrodt was readying for ...