Mallinckrodt Says Restructuring Support Agreement Discussions Would Include Co's Initiating Chapter 11 Proceedings; Says Contemplated Chapter 11 Proceedings Would Cause Co's Ordinary Shares To Be Canceled
Portfolio Pulse from Benzinga Newsdesk
Mallinckrodt has announced that it is in discussions about a restructuring support agreement that would involve the company initiating Chapter 11 bankruptcy proceedings. This would result in the cancellation of the company's ordinary shares, according to an SEC filing.
August 15, 2023 | 6:07 pm
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Mallinckrodt's potential initiation of Chapter 11 bankruptcy proceedings could lead to the cancellation of its ordinary shares, negatively impacting the company's stock price.
The announcement of potential bankruptcy proceedings indicates financial distress, which is typically a negative signal to investors. If the company's ordinary shares are cancelled, current shareholders would likely lose their entire investment, leading to a significant drop in the stock price.
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