Mallinckrodt Up On Settlement Agreement With Ohio Counties
Zacks Investment Research | Oct 01, 2019 08:46AM ET
Shares of Mallinckrodt plc (NYSE:MNK) gained 7% after it announced the execution of a definitive settlement agreement with Cuyahoga and Summit Counties in Ohio concerning the lawsuits pending in multidistrict opioid litigation (MDL) in the U.S. District Court for the Northern District of Ohio.
The settlement fully resolves the Track 1 Cases against all named Mallinckrodt entities that are currently scheduled to go to trial later in the month in the MDL. The Track 1 Cases assert various claims related to the opioid business operated by SpecGx LLC.
Per the terms, Mallinckrodt will pay a total sum of $24 million in cash and donate $6 million to the generic business, which includes addiction treatment products. The agreement also requires a $500,000 payment in two years in recognition of the counties' time and expenses.
Moreover, Mallinckrodt has agreed that the two plaintiff counties will receive the value, which would have been received under such a resolution in the event of a comprehensive resolution of government-related opioid claims.
The resolution comes as a major relief for Mallinckrodt’s shares. The shares have plunged 84.7% year to date compared with the Original post
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