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Debt
 9 Months Ended
Sep. 29, 2023
Debt Disclosure [Abstract]  
Debt Disclosure
10.Debt
The commencement of the 2023 Chapter 11 Cases constituted an event of default under certain of the Company’s debt agreements. Accordingly, all debt not reclassified as LSTC with original long-term stated maturities was classified as current on the unaudited condensed consolidated balance sheet as of September 29, 2023 (Successor). However, any efforts to enforce payment obligations under the Company's debt instruments are automatically stayed as a result of the 2023 Chapter 11 Cases and the creditors’ rights in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. See Note 2 for further information.
Debt was comprised of the following at the end of each period:
Successor
September 29, 2023December 30, 2022
Principal (Carrying Value) (1)
Unamortized Discount and Debt Issuance Costs (2)
Principal
Carrying Value
Unamortized Discount and Debt Issuance Costs
Debtor-in-Possession Financing due November 2023
$280.0 $— $— $— $— 
Receivables financing facility due December 2023
100.0 2.6 — — — 
10.00% first lien senior notes due April 2025495.0 —495.0475.9 —
10.00% second lien senior notes due April 2025321.9 —321.9242.2 —
2017 Replacement Term loan due September 20271,356.7 — 1,374.1 $1,222.1 $— 
2018 Replacement Term loan due September 2027360.1 — 364.8 326.9 — 
11.50% first lien senior secured notes due December 2028650.0 —650.0650.0 20.8
10.00% second lien senior secured notes due June 2029328.3 —328.3175.5 —
Total debt3,892.0 2.6 3,534.1 3,092.6 20.8 
Less: Current portion(380.0)(2.6)(44.1)(44.1)— 
Less: Amounts reclassified to liabilities subject to compromise (3)
(3,512.0)— — — — 
Total long-term debt, net of current portion$— $— $3,490.0 $3,048.5 $20.8 
(1)As a result of the 2023 Chapter 11 Cases, the Company expensed $377.6 million of accelerated accretion to adjust the carrying value up to the principal value or allowed claim amount pursuant to the 2023 Plan and recorded the expense within in reorganization items, net in the unaudited condensed consolidated statement of operations for the three months ended September 29, 2023 (Successor).
(2)As a result of the 2023 Chapter 11 Cases, the Company expensed $18.5 million of unamortized discount and debt issuance costs, net, recorded in reorganization items, net in the unaudited condensed consolidated statement of operations for the three months ended September 29, 2023 (Successor).
(3)In connection with the 2023 Chapter 11 Cases, $3,512.0 million of outstanding debt instruments have been reclassified to LSTC in the Company's unaudited consolidated balance sheet as of September 29, 2023 (Successor). Up to the Petition Date, the Company continued to accrue interest expense in relation to the second lien secured notes reclassified to LSTC. The Company continues to accrue and pay interest on the outstanding first lien senior secured debt instruments classified as LSTC in conjunction with the cash collateral order. Refer to Note 2 for further information.

Amended ABL Credit Agreement
On August 23, 2023, the Company entered into an amendment with the lenders and agents under the ABL Credit Agreement ("ABL Amendment"), dated as of June 16, 2022, by and among ST US AR Finance LLC, the lenders party thereto, the L/C Issuers (as defined in the ABL Credit Agreement) party thereto and Barclays Bank plc, as administrative agent ("Administrative Agent") and collateral agent (as amended, the "Amended ABL Credit Agreement"). Pursuant to the Amended ABL Credit Agreement, the Company obtained up to $100.0 million of new borrowing availability thereunder. The Company and the lenders, L/C Issuers and agent under the Amended ABL Credit Agreement separately agreed on August 23, 2023 to amend and restate the previously disclosed forbearance agreement among them (the "Amended and Restated Forbearance Agreement"), extending the forbearance period thereunder to September 12, 2023, unless such forbearance agreement (which contains customary termination events), is earlier terminated in accordance with the terms thereof. As further discussed above, any efforts to enforce payment obligations under the
Company's debt instruments were automatically stayed as a result of the commencement on August 28, 2023 of the 2023 Chapter 11 Cases. Pursuant to the terms of the ABL Amendment, as of the Availability Date (as defined in the ABL Amendment), which occurred on August 30, 2023, each of the Specified Defaults (as defined in the Forbearance Agreement) were waived.

Amendment to Purchase and Sale Agreement
In connection with the Bankruptcy Court’s approval of certain First Day Motions, on August 30, 2023, the Purchase and Sale Agreement, dated as of June 16, 2022, by and among the various entities listed on Schedule I thereto as originators or that become parties thereto as originators from time to time pursuant to Section 4.3 thereof ("Originators"), MEH, Inc., as servicer, and ST US AR Finance LLC, as buyer (as amended, the "Purchase and Sale Agreement"), was amended by the parties thereto to amend certain representations, covenants and events of default contained in the Purchase and Sale Agreement in light of the 2023 Chapter 11 Cases.

Performance Guarantees
Also in connection with the Bankruptcy Court’s approval of certain First Day Motions, on August 30, 2023, the Originators and the Administrative Agent entered into the Originator Performance Guaranty ("Originator Performance Guaranty") and MEH, Inc. and the Administrative Agent entered into the Performance Guaranty ("Performance Guaranty").
Pursuant to the Originator Performance Guaranty, each Originator guarantees performance by each other Originator of its obligations under the Purchase and Sale Agreement, which includes representations and warranties with respect to the characteristics of the receivables which such Originators sell to ST US AR Finance LLC.
Pursuant to the Performance Guaranty, MEH, Inc. guarantees performance by each Originator of its obligations under the Purchase and Sale Agreement, including with respect to such representations and warranties made by the Originators. Neither MEH, Inc. nor any Originator guarantees performance by ST US AR Finance LLC of its obligations under the Amended ABL Credit Agreement nor do they guarantee any losses arising from insolvency or lack of creditworthiness or other financial inability to pay off the underlying obligors of such receivables, or the uncollectability of any receivables.

Debtor-in-Possession Financing
Also in connection with the Bankruptcy Court's approval of certain First Day Motions, including, among others, a motion ("DIP Motion") seeking approval of a debtor-in-possession financing, the Senior Secured Debtor-In-Possession Credit Agreement ("DIP Credit Agreement"), was entered into on September 8, 2023, by and among the Company, Mallinckrodt International Finance S.A. ("MIFSA") and Mallinckrodt CB LLC (together with MIFSA, the "DIP Borrowers"), as debtors and debtors-in-possession, the lenders from time to time party thereto ("DIP Lenders"), Acquiom Agency Services LLC and Seaport Loan Products LLC, as co-administrative agents, and Acquiom Agency Services LLC, as collateral agent. On September 21, 2023, the Bankruptcy Court entered a final order granting the relief requested in the DIP Motion ("Final DIP Order").
Pursuant to the terms of the DIP Credit Agreement, the DIP Lenders provided a priming, senior secured, super-priority debtor-in-possession term loan facility in the aggregate principal amount (exclusive of capitalized fees) of $250.0 million ("DIP Facility", and the term loans advanced (or deemed advanced) thereunder, the "DIP Loans"), of which (i) an initial draw amount of $150.0 million was drawn in a single drawing on September 8, 2023, and (ii) an additional draw amount of $100.0 million was drawn in a single drawing on September 25, 2023. Borrowings under the DIP Facility are (a) senior secured obligations of the DIP Borrowers, (b) guaranteed by the Company and each of the other 2023 Debtors and (c) secured by (i) priming, automatically perfected first priority liens and security interests on substantially all property and assets of the 2023 Debtors securing the Company's pre-petition secured term loans and notes and (ii) automatically perfected first priority liens and security interests on substantially all of the 2023 Debtors' other now-owned and hereafter-acquired real and personal property and assets, in each case subject to certain carve outs and conditions. The DIP Loans accrue interest at a rate equal to the secured overnight financing rate as administered by the SOFR Administrator ("SOFR") plus 8.00%, subject to a SOFR floor of 1.00%. Upon the effectiveness of the DIP Credit Agreement, the DIP Borrowers caused a premium equal to 12.00% of the $250.0 million in backstop commitments held by certain DIP Lenders providing such commitments to be paid. Such premium was paid in kind by increasing the principal amounts of the DIP Loans. For further information regarding the DIP Credit Agreement, see the Company’s Current Report on Form 8-K filed with the SEC on September 11, 2023.
Applicable interest rate
As of September 29, 2023 (Successor), the applicable interest rate and outstanding principal on the Company's debt instruments were as follows:
Applicable Interest RateOutstanding Principal
Fixed-rate instruments10.54 %$1,795.2 
Debtor-in-Possession Financing due November 2023
13.44 280.0 
Receivables financing facility due December 2023
8.75 100.0 
2017 Replacement Term Loan due September 2027 (1)
11.94 1,356.7 
2018 Replacement Term Loan due September 2027 (1)
12.19 360.1