Synthesis of iminoisoindolinones via a cascade of the three-component Ugi reaction, palladium catalyzed isocyanide insertion, hydroxylation and an unexpected rearrangement reaction.

A robust ligand-free palladium-catalyzed cascade reaction for the synthesis of diversely substituted iminoisoindolinones has been developed. The cascade reaction involves isocyanide insertion into Ugi-3CR adducts, accompanied by unexpected hydroxylation and rearrangement.