Drugmaker Endo Files for Bankrupty Over Debt, US Opioid Litigation

Drug manufacturer Endo International Plc filed for bankruptcy after being overwhelmed by litigation, including claims that it profited by helping fuel the US opioid epidemic.

The Dublin-based company said it had initiated voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Southern District of New York. It also struck an agreement with a debt-holder group that is offering $6 billion for Endo’s assets and would take over certain liabilities.

“By definitively addressing the more than $8 billion of debt that has burdened our balance sheet and establishing a pathway to closure with respect to the thousands of opioid-related and other lawsuits that the company has been defending at an unsustainable cost, we will be able to move forward,” Blaise Coleman, Endo’s president and the chief executive officer was quoted as saying. 

Endo’s secured creditors consented to the use of cash collateral to fund day-to-day business, a statement said. 

By seeking protection from creditors, the company gains time to try to implement the restructuring plan it had been negotiating with senior lenders. The court filing also puts a temporary halt to all litigation Endo faces, allowing managers to negotiate a global deal to end the opioid lawsuits, which have been filed by states and local governments.

The company is the latest major opioid maker to seek bankruptcy protection after a wave of accusations they illegally marketed opioids tied to an epidemic of abuse that killed hundreds of thousands of Americans. 

Rivals Purdue Pharma LP and Mallinckrodt Plc each used court protection to finish working out settlements with groups that accused them of making the opioid addiction epidemic worse.

Following the bankruptcy filing, Massachusetts Attorney General Maura Healey said officials had agreed on a settlement of as much as $450 million with Endo and its lenders. The deal would ban the promotion of its opioids and require it to turn over documents. 

On top of the opioid trials, which also involved peers Purdue Pharma LP and Mallinckrodt Plc, Endo was engaged in a Tennessee lawsuit it brought against competitors for patent infringement. The company also took a $1.75 billion writedown on its sterile injectables unit after concluding the value of the business had fallen.

Endo has settled some of the suits it faces but has not announced the kind of global deal Purdue and Mallinckrodt reached before beginning their Chapter 11 cases.

Source By: Bloomberg

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