Welcome to the website of the Mallinckrodt Opioid Master Disbursement Trust II (“MDT II”). This site is intended to assist those beneficiaries of MDT II, namely the public creditor trusts and the private creditor trusts, which were established pursuant to the chapter 11 Plan confirmed in the first bankruptcy cases of Mallinckrodt plc, In re Mallinckrodt plc, Case No. 20-12522 (Bankr. D. Del.). The MDT II was created by Mallinckrodt’s first Plan, which was confirmed by order March 2, 2022, and became effective June 16, 2022 (the “2022 Plan”).

Pursuant to the 2022 Plan, MDT II was formed as the “hub” trust in a “hub & spoke” trust design, as shown in the below graphic,[1] created to provide distributions (from funds paid by Mallinckrodt and other consideration received pursuant to the 2022 Plan) to the “spoke” beneficiary trusts, including public creditors (NOAT II for the U.S. States and local governments within U.S. States and the TAFT II for the federally recognized American Indian Tribes) and private creditors (e.g., personal injury victims, persons afflicted by neonatal abstinence syndrome (“NAS”), hospitals).

MDT II Flow Chart

Pursuant to the 2022 Plan, MDT II’s primary responsibilities are to: (i) receive the upfront and deferred opioid settlement funds from Mallinckrodt (an obligation amended pursuant to the 2023 RSA and 2023 Plan); (ii) monetize the New Opioid Warrants (which MDT II did in December 2022); (iii) investigate and pursue claims against third parties that are assigned to the MDT II (pursuits that are still on-going); (iv) fix a bar date and administer “Other Opioid Claims” that were not resolved as part of the 2022 Plan (a process that is still on-going); and (v) make distributions to the public and private creditor trusts. These creditor trusts are to further disburse funds to their respective creditors who must use the settlement proceeds for approved opioid abatement strategies, or in the case of the personal injury trust, to compensate individuals for damages because of opioid-related bodily injuries.

In the spring of 2023, following the rapidly deteriorating financial condition of Mallinckrodt and an aggressive letter-writing campaign by various stakeholders of the company, the MDT II Trustees determined that it was in the best interests of MDT II’s beneficiaries to engage in conversations with the company to restructure the remaining Opioid Deferred Cash Payments (which at the time totaled $1.275 billion, and included the $200 million payment that was due on June 16, 2023). Without a comprehensive deal, MDT II’s status as an unsecured creditor in a free fall bankruptcy would have left the trust subordinate to approximately $3.5 billion in secured debt.

Following weeks of intensive negotiations, MDT II, along with other key stakeholders, signed a restructuring support agreement (the “2023 RSA”) with the company on August 23, 2023, setting forth the terms of a prepackaged financial restructuring plan.

On August 28, 2023, Mallinckrodt commenced bankruptcy proceedings (see In re Mallinckrodt plc, Case No. 20-12522 (Bankr. D. Del.)), on October 10, 2023, its second Plan of Reorganization was confirmed, and on November 14, 2023, its second Plan of Reorganization went effective (the “2023 Plan”).

The key components of the 2023 RSA and the 2023 Plan, as related to MDT II, are:

  1. MDT II received, on August 24, 2023, a one-time payment of $250 million in full satisfaction of the remaining Opioid Deferred Cash Payments, and disbursed the full amount to the Public and Private Opioid Creditor Trusts, per the waterfall under the 2022 Plan, on August 29, 2023.
  2. Mallinckrodt agreed to provide enhanced cooperation under the Cooperation Agreement to facilitate the prosecution of the three MDT II third-party litigations (reducing costs for the Trust).
  3. MDT II received contingent value rights (“CVR”), essentially warrants, in the company (which will provide some value if the performance of the company dramatically improves).

The MDT II Trustees are Michael Atkinson, Anne Ferazzi, and Jenni Peacock. Biographies for the Trustees are located on the Trust Leadership page. You can access relevant documents to the MDT II Trust, by navigating to the Important Documents page.

1 The Initial Opioid MDT II Payment was shared with three additional entities: the Department of Justice, the Public Schools’ Special Education Initiative Trust, and the Ratepayer Account.