Mallinckrodt Pharmaceuticalsoffice in St. Louis. Photo: Whitney Curtis/AP Images forMallinckrodt, File

Generic opiate manufacturer Mallinckrodt has agreed to pay $1.6billion to settle all the lawsuits against it stemming from theopioid crisis, in a deal backed by 47 attorneys general from statesand U.S. territories.

Tuesday's "settlement framework," which also resolves thousandsof claims brought by cities and counties in the multidistrictlitigation, is among the most significant globalsettlements by a corporation sued over the opioid crisis.

Related: Florida AG, pharmacy chains tangle in opioidlawsuit

"Reaching this agreement in principle for a global opioidresolution and the associated debt refinancing activities announcedtoday are important steps toward resolving the uncertainties in ourbusiness related to the opioid litigation," said Mark Trudeau,president and chief executive officer of Mallinckrodt, in astatement. "Importantly, when finalized, we believe the proposedsettlement and capital restructuring activities will provide uswith a clear path forward to achieving our long term strategy,preserving value for our financial stakeholdersand providing us with the flexibility to operateeffectively."

California Attorney General Xavier Becerra praised the dealTuesday.

"Nothing can undo the devastating loss and grief inflicted bythe opioid epidemic upon victims and their families, but thissettlement with Mallinckrodt is an important step in the process ofhealing our communities," he said in a statement. "Ouroffice has worked aggressively with our coalition partners to holdaccountable bad actors who fueled this public health crisis. Whiletoday's settlement is a step in the right direction, we'll continueto work to bring more much-needed relief to families throughoutCalifornia whose lives have been upended by the opioid crisis."

Georgia Attorney General Chris Carr made similar statements.

"This agreement with Mallinckrodt is just one example of thetimely solutions needed in our fight against the opioid epidemic,"he said. "Our office remains focused on holding accountable thosewho were responsible for fueling the epidemic and securingresources for victims."

Other states include Connecticut,Delaware, Florida, New Jersey, Pennsylvania, Texas and WashingtonD.C., according to Mallinckrodt's filings with the U.S. Securitiesand Exchange Commission.

Texas Attorney General KenPaxton, whose office also filed opioid lawsuits against PurduePharma and Johnson & Johnson, said he was part of a bipartisancoalition of 40 states that served investigative subpoenas on eightcompanies that manufacture or distribute opiate pharmaceuticals,which are prescription painkillers.

"My office has been aggressivelyworking to hold opioid manufacturers accountable for theirdeceptive marketing of highly addictive pain pills, which spurredan epidemic and left victims and families with unimaginableconsequences," he said in a statement Wednesday. "My focus is onnot only accountability, but also obtaining the resources we needto get victims of this epidemic the help they deserve."

The deal would include payments of $1.6 billion over eightyears, of which $300 million would come after Mallinckrodt's"specialty generics" subsidiaries emerged from Chapter 11bankruptcies. Mallinckrodt plc, which is based in England and hasU.S. offices in St. Louis, said the agreement involves subsidiariesMallinckrodt LLC, SpecGx LLC and other affiliates. NeitherMallinckrodt plc nor its "specialty brands" subsidiaries would bepart of the bankruptcy.

Plaintiffs would receive another $200 million in the next twoyears and $150 million for each year after that.

The payments would be part of a trust that would serve as anabatement plan and could purchase shares in Mallinckrodt'ssubsidiaries once they emerged from Chapter 11.

The plaintiffs' executive committee in the multidistrictlitigation negotiated the deal on behalf of thousands of othergovernments, most of which are cities and counties across thenation.

In an email, the plaintiffs'executive committee said the settlement was the result of a "deepdive" into Mallinckrodt's financial status.

"Such review can lead to theconclusion that a given defendant must consider bankruptcy as theonly realistic resolution," wrote committee members Paul Farrell ofThe Farrell Law Firm, Paul Hanly of Simmons Hanly Conroy and JoeRice of Motley Rice. "As result of the investigation into thefinancials and business of SPEC GX and the parent Mallinckrodt, thePlaintiffs' Executive Committee has reached an agreement inprinciple with drugmaker Mallinckrodt, which will resolve legalclaims against the company while creating a mechanism for thecompany to fund abatement through a pre-arranged bankruptcyplan."

They added that, while theparties had reached a term sheet, they still need their clients todraft, finalize and approve the full agreement, "as the PEC canonly recommend a resolution process." 

Read more: 

• Opioid manufacturers: A publicnuisance?
• The opioid crisis: How should employersrespond?
• Opioid prescriptions ebb but addiction, overdosesstill vex U.S.