LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz reminds investors of the upcoming September 5, 2023 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who acquired Mallinckrodt plc (“Mallinckrodt” or the “Company”) (NYSE: MNK) securities between June 17, 2022 and June 14, 2023, inclusive (the “Class Period”).
If you are a shareholder who suffered a loss, click here to participate.
In October 2020, Mallinckrodt filed for Chapter 11 bankruptcy protection while agreeing to settle its role in the U.S. opioid crisis by making nine payments equaling $1.7 billion over eight years to an opioid-victims compensation trust. In June 2022, the Company made its first payment as it emerged from Chapter 11 bankruptcy protection. The next payment of $200 million was due in June 2023.
On June 2, 2023, The Wall Street Journal reported that Mallinckrodt was considering bankruptcy again as its next payment due date approached. On this news, Mallinckrodt’s stock price fell $0.98, or 40%, to close at $1.47 per share on June 5, 2023, thereby injuring investors.
Then, on June 15, 2023, the Company disclosed that it had decided to not make interest payments on two bonds due that day and may need to file for bankruptcy. On this news, Mallinckrodt’s stock price fell $0.39, or 31%, to close at $0.87 per share on June 15, 2023.
Then, on June 16, 2023, the Company announced that it had extended the deadline for its $200 million payment from June 16, 2023 to June 23, 2023. However, on June 23, 2023, the Company disclosed that it had extended the deadline once more to June 30, 2023, while also reiterating the possible need to file for bankruptcy.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Mallinckrodt had overstated its financial strength, including purported enhancements to its liquidity and balance sheet, following its emergence from Chapter 11 bankruptcy protection; (2) accordingly, the Company overstated its ability to timely make one or more payments to the Trust for the Opioid Settlement; (3) all the foregoing negatively impacted Mallinckrodt’s ability and/or willingness to timely meet interest payment obligations on certain bonds; (4) as a result of all the foregoing, the Company was at an increased risk of having to again file for Chapter 11 bankruptcy protection; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased or otherwise acquired Mallinckrodt securities during the Class Period, you may move the Court no later than September 5, 2023 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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