FAQs Opioids Bankruptcies

1. 1. Are all California cities and counties eligible to receive direct payment of funds from the Mallinckrodt bankruptcy?

   • The State entered into an allocation agreement with certain local governments that governs how funds from the Mallinckrodt bankruptcy will be allocated within California. The California Mallinckrodt allocation agreement provides for direct payments to cities and counties that elected direct payment in the National Opioid Settlement with the Distributors.



2. 2. Did my city or county have to join the Mallinckrodt bankruptcy to receive direct payment?

   • No. A bankruptcy court confirmed a plan of allocation that provides for payment to states and certain local entities for opioid abatement. The California Mallinckrodt allocation agreement further provides how payments to the state will be allocated within California. The California Mallinckrodt allocation agreement provides for payments to cities and counties that elected direct payment in the National Opioid Settlement with the Distributors.



3. 3. How much will my city or county receive from the Mallinckrodt bankruptcy?

   • The amounts allocated to each eligible city and county are listed in the Notices of Abatement Distribution, which can be found on the National Opioid Abatement Trust II (NOAT II) website at https://www.nationalopioidabatementtrust.com/Home/StateTerritoryDetail?ID=14206. The allocated amounts are based on the abatement percentage listed in Appendix 1 to the State-Subdivision Agreements.



4. 4. If my city or county receives direct payments from the Mallinckrodt bankruptcy, is it required to spend the monies for particular uses?

   • Yes. Funds received from the Mallinckrodt bankruptcy are required to be used pursuant to the bankruptcy plan and related documents, including the NOAT II Trust Distribution Procedures which can be found here https://www.nationalopioidabatementtrust.com/Docs/NOAT%20II%20Trust%20Distribution%20Procedures.pdf Please see Section 2 of the NOAT II Trust Distribution Procedures.



5. 5. If my city or county receives direct payments from the Mallinckrodt bankruptcy, is it required to report on the use of funds?

   • Yes. The bankruptcy plan documents, including the NOAT II Trust Distribution Procedures, require the State and local governments that receive an Abatement Distribution from NOAT II to report on the use of such funds. See Section 7 of the NOAT II Trust Distribution Procedures. https://www.nationalopioidabatementtrust.com/Docs/NOAT%20II%20Trust%20Distribution%20Procedures.pdf. The State has elected to submit one report on behalf of itself and its local government that receive an Abatement Distribution. Cities and counties that receive an Abatement Distribution from NOAT II must report on use of those funds to DHCS. DHCS will then report the State’s, including cities’ and counties’, use of Mallinckrodt Abatement Funds to NOAT II. Individual cities and counties do not need to report directly to NOAT II.



6. 6. What about attorney’s fees for cities and counties?

   • The Mallinckrodt bankruptcy plan documents provide for the establishment of the Opioid Attorneys’ Fee Fund, which shall be used to pay qualifying costs and expenses, including attorneys’ fees, for certain state, municipal, and Tribal claims holders.



7. 7. Where can I get more information about the Mallinckrodt bankruptcy?

   • Cities/counties should first consult with their respective city attorney/county counsel. Cities and counties that retained attorneys to file opioid litigation may also wish to consult those attorneys.

     Cities and counties may also contact the Attorney General’s opioids team via email at OpioidSettlement-LocalGovernment@doj.ca.gov.

     Additional Mallinckrodt bankruptcy information is available at https://www.nationalopioidabatementtrust.com/Mallinckrodt/Documents.

     Additional information regarding reporting and use requirements can be found on DHCS’s Opioid Settlements website at https://www.dhcs.ca.gov/provgovpart/Pages/California-Opioid-Settlements.aspx.

Disclaimer: To the extent any of the answers in this FAQ are inconsistent with the Settlement Agreements, California State-Subdivision Agreements, or documents filed in the Mallinckrodt bankruptcy matters, those documents will govern over any inconsistent responses in this FAQ.