(Bloomberg) -- Drug maker Mallinckrodt Plc made its final push Wednesday for a new debt-reduction plan that gives victims of America’s opioid epidemic about $1 billion less than they were promised the last time the company tried to use the bankruptcy process to revive itself.

The company asked US Bankruptcy Judge John Dorsey to dismiss objections from shareholders who argue that Mallinckrodt should have tried harder to resolve its debt woes without filing a Chapter 11 case. Under the plan, shareholders will be wiped out, which happens in nearly all big bankruptcies unless creditors are paid in full.

Dorsey said he would announce his ruling next week. 

During the court hearing Wednesday in Wilmington, Delaware, Dorsey aimed skeptical questions at attorneys for shareholders, who argued the company had enough cash to survive until early 2024. Dorsey said current law only requires Mallinckrodt, or any other struggling company, to be in financial distress, not completely insolvent. 

“The only evidence I have,” Dorsey told a shareholder attorney, “is that if they didn’t file this bankruptcy, they would have been in trouble.”

Mallinckrodt’s new reorganization plan replaces one approved by Dorsey last year that left the company struggling to pay about $3.6 billion in debt and nearly $1.3 billion to a trust for opioid victims. Under the current plan, Mallinckrodt will slash what it owes lenders to $1.75 billion and will pay the opioid trust $250 million.

Mallinckrodt’s reorganization is built on settlements with key debtholders. 

When it filed its first bankruptcy in 2020, Mallinckrodt faced about 3,000 lawsuits and investigations in all 50 states related to its sale of opioids and other drugs, according to court papers.  

Should Dorsey approve the new plan, Mallinckrodt will be worth as much as $3.2 billion, company advisers estimated.

The case is Mallinckrodt Plc, 20-12522, U.S. Bankruptcy Court for the District of Delaware (Wilmington).

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