UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment ___)*
Mallinckrodt plc
(Name of Issuer)
Ordinary Shares, par value $0.01 per share
(Title of Class of Securities)
G5890A102
(CUSIP Number)
Jeremy Carton
Alta Fundamental Advisers LLC
1500 Broadway Suite 704
New York, NY 10036
(212) 319-1778
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
June 16, 2023
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☒
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. G5890A102
| 1. |
Names of Reporting Persons.
Alta Fundamental Advisers LLC | |||||
| 2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☐
| |||||
| 3. | SEC Use Only
| |||||
| 4. | Source of Funds (See Instructions)
OO | |||||
| 5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
| 6. | Citizenship or Place of Organization
Delaware | |||||
| Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
1,947,093 | ||||
| 8. | Shared Voting Power
0 | |||||
| 9. | Sole Dispositive Power
1,947,093 | |||||
| 10. | Shared Dispositive Power
0 | |||||
| 11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
1,947,093 | |||||
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
| 13. | Percent of Class Represented by Amount in Row (11)
14.8% | |||||
| 14. | Type of Reporting Person (See Instructions)
IA | |||||
| Item 1. |
Security and Issuer | |
| This Schedule 13D relates to the ordinary shares, par value $0.01 per share (“Ordinary Shares”), of Mallinckrodt plc (the “Issuer”), which has its principal executive offices at College Business & Technology Park, Cruiserath, Blanchardstown, Dublin 15, Ireland. | ||
| Item 2. |
Identity and Background | |
| (a) This Schedule 13D is being filed by Alta Fundamental Advisers LLC (“Alta Advisers” or the “Reporting Person”).
(b) The address of the principal business office of the Reporting Person is 1500 Broadway Suite 704, New York, NY 10036.
(c) The principal business of the Reporting Person is acting as an investment adviser to private funds and managed accounts.
(d) During the last five years, neither the Reporting Person, nor to the Reporting Person’s knowledge, any of the persons listed in Schedule A, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither the Reporting Person, nor to the Reporting Person’s knowledge, any of the persons listed in Schedule A, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree of final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) The Reporting Person is a Delaware limited liability company.
Schedule A attached hereto sets forth the information regarding the manging members of the Reporting Person. |
| Item 3. |
Source and Amount of Funds or Other Consideration | |
| The funds used in purchasing shares of Ordinary Shares on behalf of clients of Alta Advisers come from private funds and various client accounts advised by Alta Advisers. | ||
| Item 4. |
Purpose of Transaction | |
| On June 16, 2023, the Reporting Person sent a letter to the Issuer’s board of directors (the “Board”) with respect to the requisition of the Board to convene an extraordinary general meeting of the Issuer’s shareholders. A copy of the letter is attached to this Schedule 13D as Exhibit 1 and is incorporated by reference herein.
The Reporting Person expects to continuously review its investment in the Issuer and, depending on various factors including but not limited to, the price of the shares of the Ordinary Shares, the terms and conditions of the transaction, prevailing market conditions and such other considerations as such Reporting Person deems relevant, may at any time or from time to time, and subject to any required regulatory approvals, acquire or dispose of additional Ordinary Shares from time to time on the open market, in privately- negotiated transactions, directly from the Issuer, or pursuant to other transactions. | ||
| Item 5. |
Interest in Securities of the Issuer | |
| (a) The information set forth in rows 11 and 13 of the cover page to this Schedule 13D is incorporated by reference. The percentage set forth in row 13 is based on 13,170,932 Ordinary Shares outstanding as of May 5, 2023, as reported in the Issuer’s Form 10-Q filed on May 9, 2023. Managed funds and clients advised by Alta Advisers directly hold 1,947,093 Ordinary Shares.
(b) The information set forth in rows 7 through 10 of the cover pages to this Schedule 13D is incorporated by reference.
(c) Schedule B sets forth all transactions with respect to the Ordinary Shares effected during the past sixty days by the Reporting Person. | ||
| (d) The funds and clients advised by Alta Advisers have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Ordinary Shares.
(e) Not applicable. | ||
| Item 6. |
Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer | |
| The information set forth in Item 4 above is incorporated by reference into this Item 6.
Affiliates of the Reporting Person hold first lien debt and first lien bonds of the Issuer. | ||
| Item 7. |
Material to be Filed as Exhibits | |
| Exhibt 1 Letter to the Board of Directors of Mallinckrodt plc, dated June 16, 2023. | ||
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| Dated: June 16, 2023 | ||
| ALTA FUNDMENTAL ADVISERS LLC | ||
| By: | /s/ Jeremy Carton | |
| Name: Jeremy Carton | ||
| Title: Managing Member | ||
Schedule A
The following sets forth the name, address, principal occupation, citizenship and beneficial ownership of Ordinary Shares (to the extent not pursuant to Item 5(a)) of each managing member of Alta Advisers.
| Alta Advisers |
||||||
| Name and Citizenship |
Position |
Principal Business Address |
Beneficial Ownership of | |||
| Gilbert Li | Managing Member | 1500 Broadway Suite 704 New York, NY 10036 |
None | |||
| Jeremy Carton | Managing Member | 1500 Broady Suite 704 New York, NY 10036 |
None |
Schedule B
| Date of Transaction | Number of Shares Acquired or Disposed |
Type of Transaction | Price per Share | |||||||||||||
| Managed Fund or Account |
05/19/2023 | 175,380 | Purchase | $ | 4.1846 | |||||||||||
| Managed Fund or Account |
05/19/2023 | 215,989 | Purchase | $ | 4.1846 | |||||||||||
| Managed Fund or Account |
05/19/2023 | 508,631 | Purchase | $ | 4.1846 | |||||||||||
Exhibit 1
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June 16, 2023
Via Registered Mail and Email
Sigurdur Olafsson, President and Chief Executive Officer
Mark Tyndall, Executive Vice President and Chief Legal Officer & Corporate Secretary
c/o Mallinckrodt Pharmaceuticals
College Business & Technology Park
Cruiserath, Blanchardstown
Dublin 15, Ireland
Board of Directors of Mallinckrodt plc
c/o Mallinckrodt plc
College Business & Technology Park
Cruiserath, Blanchardstown
Dublin 15, Ireland
and
c/o George A. Davis
Latham & Watkins LLP
1271 Avenue of the Americas
New York, NY 10020
United States
george.davis@lw.com
| Re: | Mallinckrodt plc, June 15, 2023, SEC Form 8-K and Call for Extraordinary General Meeting |
Dear All:
We represent Alta Fundamental Advisers LLC (“Alta”) as investment manager for various related funds. As you know, Alta and its related funds hold 14.80% of the common stock of Mallinckrodt Plc (the “Company”). We are writing in response to the Company’s SEC Form 8-K filed June 15, 2023 (“8-K”). This letter serves as Alta’s requisition of the Company’s Board of Directors “to forthwith proceed duly to convene an extraordinary general meeting” under the Companies Act 2014 as described below.
In the 8-K, the Company disclosed that it “is actively evaluating the Company’s financial situation and considering options” promoted by the Company’s debtholders and other “stakeholders.” The Company also disclosed its decision to default on credit obligations and that it is considering a “near term” bankruptcy filing. While disclosing the election not to satisfy financial obligations and the specter of bankruptcy, the Company reminded us of the $260 million settlement resulting from allegations of payment of illegal kickbacks and Medicare drug rebate underpayments.
June 16, 2023
Page 2
This 8-K confirms that the Board of Directors is not up to the task of managing the business affairs of the Company. Several out-of-court options exist for improving the Company’s financial condition that the Board of Directors should already have been exploring and continuing to explore through fruition. These include options that the public market has been discussing. The myopic focus on bankruptcy in the 8-K suggests that the Board of Directors is planning to wrongly capitulate to the Company’s debtholders and ultimately pass off its duties and responsibilities with a bankruptcy filing.
The 8-K also raises concerns regarding the historical conduct of members of the Board of Directors and management. On May 9, 2023, five weeks ago, the Company disclosed that its cash and cash equivalents as of March 31, 2023, had risen to $480 million. The Company expressed how it was “pleased” with its performance and that its “sources of liquidity are adequate to fund …operations for the next twelve months and foreseeable future.” Consistent with its written pronouncements, in the Company’s public conference call, management talked about how the Company’s fundamental business was improving. The 8-K obviously cannot be squared with these very recent positive public statements. The purported overnight deterioration in the Company’s financial situation eviscerates any lingering confidence in management’s candor and compliance with its disclosure obligations, and ability to adapt to and address the circumstances described in the 8-K.
Accordingly, to protect the Company, Alta is exercising its right to compel the Board of Directors to call an extraordinary general meeting under the Companies Act 2014. At this meeting, Alta will introduce a resolution to remove and replace the members of the Board of Directors. Alta believes that it will obtain the support of the majority of the Company’s shareholders in connection with this imperative initiative and fully expects to replace the current Board of Directors at this meeting with individuals who are up to the task.
You are on notice that any actions taken by the current Board of Directors pending the extraordinary general meeting at which the directors will be removed and replaced shall be subject to the highest scrutiny. As you know, the Companies Act 2014 imposes duties on directors (Section 228), the failure to comply with which may lead to criminal (see generally Part 14, Chapter 7) and civil liability, including personal liability for the Company’s debts and liabilities (Section 232). Any action taken in derogation of the directors’ fiduciary duties and any resulting harm to Alta and its fellow stockholders will result in legal action against the offending parties and all those participating in the wrongdoing. The Board of Directors certainly should not take extraordinary action along the lines suggested by the 8-K at this time.
June 16, 2023
Page 3
We look forward to the Board of Directors’ prompt scheduling of the extraordinary general meeting demanded by Alta herein.
| Very truly yours, |
| /s/ Christopher J. Clark |
| Christopher J. Clark |
|
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| Jeremy Carton for Alta Fundamental Advisers LLC |
cc Jeffrey D. Rotenberg