

20.	Subsequent Events

Commitments and Contingencies

Multnomah County Lawsuit. On August 3, 2017, the County of Multnomah filed a lawsuit in Multnomah County Circuit Court in Oregon against certain prescription opioid manufacturers, including the Company, as well as distributors and healthcare providers. The lawsuit alleges the creation of a public nuisance arising from defendants’ manufacturing, distribution, marketing and promotion of opioids and alleges other common law claims. Plaintiff seeks economic damages and costs. The Company intends to vigorously defend itself in this matter.

Department of Justice Subpoena. On July 26, 2017, the Company received a subpoena from the Department of Justice for documents related to the marketing and sale of the Company’s opioid products.

Employee Stock Purchase Plan Securities Litigation. On July 20, 2017, a purported purchaser of Mallinckrodt stock through Mallinckrodt’s ESPPs, filed a derivative lawsuit in the Federal District Court in the Eastern District of Missouri, captioned Solomon v. Mallinckrodt plc, et al., against the Company, its CEO, its CFO, its Controller, and current and former directors of the Company. The complaint purports to be brought on behalf of all persons who purchased or otherwise acquired Mallinckrodt stock between November 25, 2014 and January 18, 2017 in the ESPPs. In the alternative, the plaintiff alleges a class action for those same purchasers/acquirers of stock in the ESPPs during the same period. The complaint asserts claims under Section 11 of the Securities Act, and for breach of fiduciary duty, misrepresentation, non-disclosure, mismanagement of the ESPPs’ assets and breach of contract arising from substantially similar allegations as those contained in the Putative Class Action Securities Litigation filed in January 2017. The Company intends to vigorously defend itself in this matter.

FTC Investigation. On July 16, 2017, in connection with the settlement with the FTC and the Settling States, the Company announced the completion of the license of both the Synacthen trademark and certain intellectual property associated with MNK-1411 to West Pharmaceuticals to develop and pursue possible FDA approval of the product in IS and NS. The Company retains the right to develop MNK-1411 for all other indications in the U.S. and retains rights to the Synacthen trademark outside the U.S.

DEA Investigation. On July 11, 2017, the Company entered into a final settlement with the DEA and the USAOs for the Eastern District of Michigan and the Northern District of New York, respectively, to settle these investigations. As part of the agreement, the Company paid $35.0 million in July 2017 to resolve all potential claims.

See further discussion of the aforementioned matters in Note 16 of the notes to the unaudited condensed consolidated financial statements.

Accounts Receivable Securitization

On July 28, 2017, Mallinckrodt Securitization S.à r.l. ("Mallinckrodt Securitization"), a wholly owned special purpose subsidiary of the Company, entered into a $250.0 million accounts receivable securitization facility ("the Receivable Securitization") with a three year term. Mallinckrodt Securitization may, from time to time, obtain up to $250.0 million in third-party borrowings secured by certain receivables. The borrowings under the Receivable Securitization are to be repaid as the secured receivables are collected. Loans under the Receivable Securitization will bear interest (including facility fees) at a rate equal to one month LIBOR rate plus a margin of 0.9%. Unused commitments on the Receivables Securitization are subject to an annual commitment fee of 0.4%. The Receivable Securitization agreements contain customary representations, warranties, and affirmative and negative covenants. The size of the securitization facility may be increased to $300.0 million upon approval of the third-party lenders.

InfaCare Acquisition

On August 3, 2017, the Company entered into an agreement to acquire InfaCare Pharmaceutical Corporation ("InfaCare") for an upfront payment of $80.0 million, with additional payments of up to $345.0 million dependent on regulatory and sales milestones. InfaCare is focused on development and commercialization of proprietary pharmaceuticals for neonatal and pediatric patient populations. InfaCare's developmental product stannsoporfin, a heme oxygenase inhibitor, is under investigation for its potential to reduce the production of bilirubin, the elevation of which can contribute to serious consequences in infants. This transaction is expected to close in the second half of 2017.