Perrigo Shareholders Face Millions in Losses Over Missed Opt-Out Deadline

Perrigo plc is at the center of a legal dispute stemming from its rejection of a takeover bid and subsequent financial fallout. A securities class action lawsuit was filed in 2016, and Sculptor Fund, a largest investor, missed the opt-out deadline. The court will now decide if Sculptor can belatedly remove itself from the case, potentially affecting millions of dollars in investor claims.

Perrigo plc, the largest maker of over-the-counter healthcare products, is at the center of a legal dispute stemming from its rejection of a takeover bid and subsequent financial fallout. A securities class action lawsuit was filed in 2016, alleging that the company made misleading statements about its financial performance during the process. Sculptor Fund, one of the largest investors in Perrigo, missed the opt-out deadline for the class action, potentially affecting millions of dollars in investor claims.

The case now includes a battle over whether Sculptor Fund can belatedly remove itself from the related securities class action. Sculptor Fund owns about 5% of Perrigo's shares and filed its lawsuit in 2019 while class certification was still pending. The class was certified later that year, and members had until December 2020 to opt out. Sculptor admits it received the opt-out notice but never submitted the required exclusion request.

Despite this oversight, Sculptor and Perrigo acted as though Sculptor had opted out. Perrigo listed Sculptor as an opt-out plaintiff in court filings, status reports, and SEC annual reports. Sculptor participated in depositions and discovery as part of the supposed opt-out group. Neither side noticed the error until April 2024, when a proposed settlement required all class members pursuing individual claims to dismiss them.

When confronted with its omission, Sculptor sought to opt out nearly three and a half years late. It argued that its independent lawsuit and related litigation activity showed a clear intent to opt out, warranting retroactive exclusion. Alternatively, it claimed "excusable neglect" and challenged the sufficiency of the class notice.

The court will now decide whether that argument holds, a ruling that could determine if Sculptor can continue pursuing its separate case or must instead accept the class settlement terms. The case is Perrigo Institutional Investor Group et al v. Joseph C. Papa et al, 3rd U.S. Circuit Court of Appeals, No. 24-2861.

Last week, Perrigo reported second-quarter adjusted earnings of $0.57, below the consensus of $0.59. Sales of $1.06 billion were also below the Wall Street estimate of $1.08 billion. Perrigo reaffirmed its fiscal 2025 adjusted earnings per share guidance of $2.90-$3.10, compared to the consensus of $3.04, and its sales guidance of $4.37 billion-$4.50 billion, compared to the consensus of $4.43 billion.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3U40PR:0-court-says-hedge-fund-s-mistake-cost-it-chance-to-sue-over-failed-perrigo-takeover/
[2] https://www.benzinga.com/news/legal/25/08/47102468/missed-opt-out-deadline-could-cost-investors-millions-in-perrigo-fraud-suit