Settlement Alert: Mallinckrodt plc Securities Litigation

8/2/2022 - On August 2, 2022, United States District Judge Dabney L. Friedrich of the District of Columbia granted final approval of the $65.75 Million settlement.  The Judgment entered by the Court is available here.  In approving the Settlement, Judge Friedrich found that the Lead Plaintiff, the State Teachers Retirement System of Ohio (“STRS Ohio”), had faithfully represented the Settlement Class and that STRS Ohio and Lead Counsel, Barrack Rodos & Bacine (“BR&B”), had appropriately entered into settlement discussions via a mediation of the case while discovery was taking place and after filing a motion for class certification.  The Judge further found that negotiating this substantial settlement while Mallinckrodt was in bankruptcy proceedings was a considerable accomplishment.  The Judge concluded that “in light of the benefits to the Settlement Class, the complexity and expense of further litigation, the risks of establishing liability and damages, and the costs of continued litigation, said Settlement is, in all respects, fair, reasonable, and adequate to the Settlement Class.” 

The Court also approved the Plan of Allocation proposed by STRS Ohio and BR&B, as described in the Notice provided to Settlement Class members.  The Court found that the Plan of Allocation is fair and reasonable to the members of the Settlement Class, and directed that the Plan of Allocation form the basis for calculating all proofs of claim submitted by Settlement Class members.  A copy of the Order Approving the Plan of Allocation is available here.  The Court also granted in full the motion filed by Lead Counsel for attorneys’ fees and reimbursement of litigation expenses at the levels identified in the Notice. 

No Settlement Class member had submitted an objection either to the Settlement, the Plan of Allocation, or the fee and expense application.

PLEASE NOTE THAT the Settlement is on behalf of a certified Settlement Class of investors that purchased Mallinckrodt common stock from October 6, 2015 through November 6, 2017, and who suffered a loss as a result.  The deadline for Settlement Class members to submit a Proof of Claim, available here, is October 27, 2022.

7/28/2022 - The Court confirmed to the parties that the Settlement Hearing will take place in person on August 2, 2022 at 10:00 a.m., before the Honorable Dabney L. Friedrich at the United States District Court for the District of Columbia, 333 Constitution Avenue, Courtroom 14, Washington D.C. 20001.  You do NOT need to attend the Settlement Hearing to receive a distribution from the Net Settlement Fund.  

7/12/2022 - There has been a change in the date of the Settlement Hearing.  Initially, the hearing was set to be held on July 28, 2022 at 10:00 a.m.  However, the Court has re-set the date of the Settlement Hearing to August 2, 2022, at 10:00 a.m. 

Accordingly, please note the following revised paragraph about the Settlement Hearing:

A hearing will be held on August 2, 2022 at 10:00 a.m., before the Honorable Dabney L. Friedrich at the United States District Court for the District of Columbia, 333 Constitution Avenue, Courtroom 14, Washington D.C. 20001, or as may be undertaken via a remote proceeding such as Zoom or by telephone.  Class Members should check the Settlement Class website after July 29, 2022, to determine whether that hearing will occur in person at the United States District Court for the District of Columbia or via a remote link or teleconference.  You do NOT need to attend the Settlement Hearing to receive a distribution from the Net Settlement Fund.   

4/27/2022 - This website is maintained by Barrack, Rodos & Bacine, the Court-appointed Lead Counsel for the members of the Settlement Class in the Action captioned Shenk, et al. v. Mallinckrodt plc, et al., Case No. 1:17-cv-00145-DLF, which is pending in the United State District Court for the District of Columbia.

The information contained on this web page is only a summary of information presented in more detail in the Notice of Class Action, Proposed Settlement, Motion for Attorneys’ Fees and Expenses, and Settlement Hearing (the “Notice”), which is available here. Since this website is just a summary, you should review the Notice for additional information.  In brief, the Lead Plaintiff, State Teachers Retirement System of Ohio, reached a proposed Settlement with the Defendants in the Litigation, for $65,750,000.00 in cash payable from proceeds of certain D&O Policies, as defined in the Amended Stipulation and Agreement of Settlement, available here.  The Settlement, if approved, will resolve all claims asserted against the Released Defendant Parties (identified in the Notice).   

If you are a Settlement Class Member, your legal rights will be affected by this Settlement whether you act or do not act.  Please read the Notice carefully.

IF YOU PURCHASED OR OTHERWISE ACQUIRED MALLINCKRODT PLC COMMON STOCK DURING THE PERIOD FROM OCTOBER 6, 2015 THROUGH NOVEMBER 6, 2017, INCLUSIVE (THE “SETTLEMENT CLASS PERIOD”) AND WERE DAMAGED THEREBY, YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.

If you are a member of the Settlement Class, your have the following legal rights and options in the setttlement:

  • SUBMIT A PROOF OF CLAIM AND RELEASE FORM POSTMARKED NO LATER THAN OCTOBER 27, 2022 This is the only way to get a payment from the Settlement.  The Proof of Claim and Release Form is available here.
  • EXCLUDE YOURSELF FROM THE CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION POSTMARKED NO LATER THAN JUNE 28, 2022:  Get no payment from the Settlement.  This is the only option that allows you to ever be part of any other lawsuit against the Defendants and Released Defendant Parties concerning the claims that were, or could have been, asserted in this case.  It is also the only way for Class Members to remove themselves from the Class. If you are considering excluding yourself from the Class, please note that there is a risk that new claims asserted against the Defendants many no longer be timely and could be time-barred.  See page 10 of the Notice
  • OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION POSTMARKED NO LATER THAN JUNE 28, 2022:  Write to the Court and explain why you do not like the Settlement, the proposed Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of expenses.   In order to object, you must remain a member of the Class, may not exclude yourself, and you will be bound by the Court’s determinations.
  • ATTEND THE HEARING ON JULY 28, 2022 AT 10:00 A.M., AND FILE A NOTICE OF INTENTION TO APPEAR SO THAT IT IS POSTMARKED NO LATER THAN JUNE 28, 2022:  Ask to speak in Court about the fairness of the Settlement, the proposed Plan of Allocation, or the request for attorneys’ fees and reimbursement of expenses.
  • DO NOTHING:  Get no payment.  Remain a Class Member.  Give up your rights.  Still be bound by the terms of the Settlement.
The Settlement Hearing

A hearing will be held on July 28, 2022 at 10:00 a.m., before the Honorable Dabney L. Friedrich at the United States District Court for the District of Columbia, 333 Constitution Avenue, Courtroom 14, Washington D.C. 20001, or as may be undertaken via a remote proceeding such as Zoom or by telephone. The Court may change the date of the Settlement Hearing without providing another notice.  Class Members should check the Settlement Class website in advance of the Settlement Hearing to determine whether that hearing will occur in person at the United States District Court for the District of Columbia or via a remote link or teleconference.  You do NOT need to attend the Settlement Hearing to receive a distribution from the Net Settlement Fund.    

What is this case about?

Lead Plaintiff alleged that the Defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934.  The Consolidated Class Action Complaint is available here.  On July 30, 2019, the Court sustained the claims asserted in the Complaint filed by Lead Plaintiff that Defendants violated the federal securities law by: (1) on October 6, 2015, misrepresenting the portion of Acthar sales attributable to Medicare and Medicaid; (2) in a Form 10-K filed on November 29, 2016, making false statements relating to a Federal Trade Commission investigation; and (3) from January 19, 2017 through August 8, 2017, making a series of false and misleading statements concerning Acthar sales and prospects, including financial and Acthar-related guidance to the market. The Court's decision on the motion to dismiss is available here.  

Defendants have denied the claims asserted against them in the Action and deny having engaged in any wrongdoing or violation of law of any kind whatsoever.  Defendants have agreed to the Settlement solely to eliminate the burden and expense of continued litigation. 

The Settlement Benefits

Pursuant to the Settlement, Defendants have agreed to a $65,750,000.00 Settlement. If the Settlement is approved by the Court, the Net Settlement Fund (the Settlement Fund less taxes, notice and administration costs, attorneys’ fees and other litigation expenses that may be awarded by the Court) will be distributed to Settlement Class Members who submit valid Proof of Claim and Release Forms in accordance with the proposed Plan of Allocation.  

The Net Settlement Fund will not be distributed unless and until the Court has approved the Settlement and a Plan of Allocation, and the time for any petition for rehearing, appeal or review has expired.

At this time, it is not possible to make any determination as to how much any individual Settlement Class member may receive from the Settlement.

Additional Information:

For more details regarding this Settlement, please review the Notice, the Stipulation and Agreement of Settlement, and other important documents filed in the case, available below.  You may also review the settlement website here, or contact the Claims Administrator or Lead Counsel for additional information regarding this Settlement:

Claims Administrator:

Mallinckrodt PLC Securities Litigation Claims Administrator
c/o A.B. Data
P.O. Box 170707
Milwaukee, WI 53217
Phone: (414) 921-0496 (U.S. and Canada) and (877) 315-0590 (outside U.S. and Canada)
www.MallinckrodtSecuritiesLitigation.com

Lead Counsel:

Barrack, Rodos & Bacine
Jeffrey W. Golan
Jeffrey B. Gittleman
3300 Two Commerce Square
2001 Market Street
Philadelphia, PA 19103
JGolan@barrack.com
JGittleman@barrack.com