“It could be devastating,” said Joseph Steinfeld, an attorney representing individuals harmed by Mallinckrodt’s pain medications. “It potentially could wipe out the whole settlement.”
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If Mallinckrodt files a second bankruptcy, payouts would likely go first to company executives, staff and other creditors, with opioid-related claims paid out last.
This seems to be the norm. Liabilities get too high and the business rolls up into bankruptcy. Individuals have their wages garnished till their debt is repaid. I feel like there should be an onus on the board/executive team till the settlement is reach. But I don’t really know what would be the most fair and scaleable to other instances of this.