PERRIGO Co plcPRGO
PERRIGO Co plc Commitments Disclosure
COMMITMENTS AND CONTINGENCIES
At December 31, 2025, we had non-cancelable purchase obligations totaling $275.2 million consisting of contractual commitments to purchase materials and services to support operations. The majority of the obligations are expected to be paid within one year.
In view of the inherent difficulties of predicting the outcome of various types of legal proceedings, we cannot determine the ultimate resolution of the matters described below. We establish reserves for litigation and regulatory matters when losses associated with the claims become probable and the amounts can be reasonably estimated. The actual costs of resolving legal matters may be substantially higher or lower than the amounts reserved for those matters. For matters where the likelihood or extent of a loss is not probable or cannot be reasonably estimated as of December 31, 2025, we have not recorded a loss reserve. If certain of these matters are
determined against us, there could be a material adverse effect on our financial condition, results of operations, or cash flows. We currently believe we have valid defenses to the claims in these lawsuits and intend to defend these lawsuits vigorously regardless of whether or not we have a loss reserve. Other than what is disclosed below, we do not expect the outcome of the litigation matters to which we are currently subject to have, individually or in the aggregate, a material adverse effect on our financial condition, results of operations, or cash flows.
Price-Fixing Lawsuits Related to the Company's Former Rx Business
Beginning in 2016, the Company, along with other manufacturers, was named as a defendant in lawsuits in the United States and Canada generally alleging anticompetitive conduct with respect to the sale of generic drugs by the Company’s former Rx business. The complaints have been filed by putative classes of direct purchasers, end payors, and indirect resellers, as well as individual direct and indirect purchasers that have opted out of the putative classes, including pharmacies, health insurers, hospitals, self-insured employers, retail customers and certain cities and counties. The complaints allege a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for various generic drugs in violation of federal and state antitrust and consumer protection laws. There are 45 complaints naming Perrigo entities as defendants that are currently pending in the MDL court and several other state and federal courts. Five additional complaints naming Perrigo entities as defendants were filed in 2025 by certain pharmacy chains, health insurers and self-insured employers.
While most of the class complaints involve alleged single-drug conspiracies, the three putative classes and many of the opt-out plaintiffs have each filed over-arching conspiracy complaints alleging that Perrigo and other manufacturers (and some individuals) entered into an “overarching conspiracy” that involved allocating customers, rigging bids, and raising, maintaining, and fixing prices for various products. The vast majority of the lawsuits described in this section have been consolidated in the In re Generic Pharmaceuticals Pricing Antitrust Litigation multidistrict litigation ("MDL") MDL No. 2724 (United States District Court for Eastern District of Pennsylvania).
The MDL Court initially designated three sets of cases to proceed as the first phase of "bellwethers," meaning that they will proceed on a more expedited basis than the other cases in the MDL. Those cases are (a) class actions alleging "single drug" conspiracies, one set involving Clobetasol and one set involving Clomipramine; and (b) the third Complaint filed by the State Attorneys General alleging an overarching conspiracy concerning various topical products (described below). Perrigo was initially named as a defendant in the Clobetasol class bellwether cases, but the classes voluntarily dismissed their claims against Perrigo relating to “single drug” conspiracies involving Clobetasol in May 2023. Summary judgment motions in the State bellwether case were initially filed in September 2024, and briefing on those motions is complete. The court certified classes of direct and “end-user” customers of the products at issue on March 7, 2025. The Third Circuit accepted an appeal of the class certification decisions in the class bellwether cases on June 17, 2025. All district court proceedings in those cases are stayed pending resolution of that appeal.
On October 15, 2024, the MDL Court selected the first multi-drug complaint brought by direct action plaintiff Humana, Inc., which names Perrigo as a defendant, to proceed in the second phase of bellwether cases in the MDL. Fact discovery in the Humana bellwether case closed on October 1, 2025. Expert discovery will close on February 27, 2026. Summary judgment briefing will begin on March 6, 2026, and be completed by April 20, 2026. Trial is scheduled to begin on September 15, 2026.
On September 26, 2025, the MDL Court selected three additional multi-drug complaints brought by direct action plaintiffs Kroger Co., Cigna Corp., and CVS Pharmacy, Inc., each of which names Perrigo as a defendant, to proceed in the third phase of bellwether cases in the MDL. The Court in February 2026 issued orders designating portions of the complaints in the Kroger and Cigna cases as bellwethers with the trials in those bellwethers set to start in August 2027 and January 2028 respectively, and setting schedules for the remaining pretrial deadlines in those cases.
State Attorney General Complaint
On June 10, 2020, the Connecticut Attorney General’s office filed a lawsuit on behalf of Connecticut and 50 other states and territories against Perrigo, 35 generic pharmaceutical manufacturers, and certain individuals (including two former Perrigo employees), alleging an overarching conspiracy to allocate customers and/or fix, raise, or stabilize prices of eighty products. This case is included among the “bellwether cases” designated to follow the expedited schedule described above. In April 2024, this case was remanded from the MDL and transferred to the District of Connecticut. The court ordered three rounds of summary judgment briefing. Briefing on all three rounds of summary judgment motions is complete. The district court denied motions for summary judgment concerning the alleged overarching conspiracy and statute of limitations and granted in part and denied in part a motion for
summary judgment concerning the damages, civil penalties, and other remedies that the states may seek. Several additional summary judgment motions, including Perrigo’s company-specific summary judgment motion, remain to be decided. No trial date has been set for this case.
Canadian Class Action Complaint
In June 2020, an end payor filed a class action in Federal Court in Canada against Perrigo and 29 manufacturers alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of dozens of products, most of which were neither made nor sold by Perrigo's former Rx business. The product conspiracies allegedly involving Perrigo focus on the same products as those involved in other MDL complaints naming Perrigo. In October 2025, the Court held a hearing on the motion to certify the action as a class proceeding, during which the plaintiff informed the court that she is no longer seeking class certification against Perrigo and invited the court to dismiss the action against Perrigo. On February 20, 2026, the Court dismissed the Plaintiff's motion to certify the proceeding as a class action without leave to amend. The Court also dismissed the action with prejudice against the Perrigo defendants, thereby concluding the action against the Perrigo entities.
Securities Litigation
In the United States (cases related to events in 2015-2017)
The securities class action and related opt-out lawsuits described in this section have each been resolved during fiscal years 2024 or 2025, as described further below.
Beginning in May 2016, purported class action complaints and a subsequent amended complaint were filed against the Company and 11 current or former directors and officers, in the U.S. District Court for the District of New Jersey (Roofer's Pension Fund v. Papa, et al.) alleging violations of federal securities laws. The allegations were in connection with, among other things, the actions taken by the Company to defend against the 2015 unsolicited takeover bid by Mylan and disclosures during 2015-2017 related to the integration of the Omega acquisition, reporting of organic growth, alleged price fixing activities, and improper accounting for the Tysabri® royalty stream.
Following a motion to dismiss that was granted in part and denied in part in 2018, the claims that remained in the case related to the integration issue regarding the Omega acquisition, the defense against the Mylan tender offer, and the alleged price fixing activities with respect to generic prescription pharmaceuticals. The three defendants who remained in the case (Perrigo and its former CEO, Joseph Papa, and former CFO, Judy Brown) filed answers in 2018 denying liability.
On November 14, 2019, the Court granted the lead plaintiffs’ motion and certified three classes for the case: (i) all those who purchased shares between April 21, 2015 through May 2, 2017 inclusive on a U.S. exchange and were damaged thereby; (ii) all those who purchased shares between April 21, 2015 through May 2, 2017 inclusive on the Tel Aviv exchange and were damaged thereby; and (iii) all those who owned shares as of November 12, 2015 and held such stock through at least 8:00 a.m. on November 13, 2015 (whether or not a person tendered shares in response to the Mylan tender offer) (the "tender offer class"). The three defendants later moved for summary judgment and challenged plaintiffs' experts. In 2023, the Court granted summary judgment in part (dismissing one individual defendant entirely, dismissing another in part, and leaving open additional issues with respect to the Company for further development).
On April 5, 2024, the class plaintiffs filed papers seeking Court approval of a settlement between the alleged classes and the defendants for $97.0 million. Perrigo and the remaining individual defendant agreed to the proposed settlement without any concession of liability or wrongdoing. We recorded an additional loss provision of $34.0 million during the first quarter of 2024 as a result of the pending settlement. In May 2024, the Company funded the $97.0 million to an escrow account controlled by class counsel under the Court supervision until final approval and relieved the corresponding liability from Other accrued liabilities on the Consolidated Balance Sheets as of June 29, 2024. The expense was presented within Other operating (income) expense, net on the Consolidated Statements of Operations for the year ended December 31, 2024. On September 5, 2024, the Court granted final approval of the class action settlement and dismissed the case with prejudice with respect to Perrigo, its co-defendant, and all other individuals who previously had been named as defendants.
In addition to the Roofers class action, during the period from November 2017 to February 2021, more than 20 individual cases were filed against us in the New Jersey federal court, and in some cases, Mr. Papa and Ms. Brown. In one instance, in September 2024 the New Jersey federal court held that the plaintiffs in one individual case failed to opt-out and therefore could only recover through the class action. The U.S. Court of Appeals for the Third Circuit affirmed that ruling in August 2025. The plaintiffs in that case did not seek further appellate review, and
the time for plaintiffs to seek review by the U.S. Supreme Court expired during the fourth quarter of 2025. All other individual cases in the New Jersey federal court settled during 2024 or 2025 without any concession of liability by any of the defendants. Settlement payments were made during 2024 or 2025 as the settlements were achieved. Each of the remaining individual cases was dismissed with prejudice.
In addition, one individual case was brought under different legal theories in a Massachusetts state court against the Company, Mr. Papa, and Ms. Brown with factual allegations that generally were similar to some of the factual allegations in the Amended Complaint in the Roofer's case described above. This case also settled in early 2025 without any concession of liability by any of the defendants. The settlement payment and dismissal with prejudice occurred during 2025.
We recorded an additional loss provision of $28.9 million during the year ended December 31, 2025 as a result of the individual cases referenced above. The expense is presented within Other operating (income) expense, net on the Consolidated Statements of Operations for the year ended December 31, 2025.
In Israel (cases related to events in 2015-2017)
On June 28, 2017, a plaintiff filed a complaint in Tel Aviv District Court styled Israel Elec. Corp. Employees’ Educ. Fund v. Perrigo Company plc, et al. The lead plaintiff seeks to represent a class of shareholders who purchased Perrigo stock on the Tel Aviv exchange during the period from April 24, 2015 through May 3, 2017 and also a claim for those that owned shares on the final day of the 2015 Mylan tender offer. The complaint names as defendants the Company, Ernst & Young LLP (the Company’s auditor), and 11 current or former directors and officers of Perrigo from the 2015-2017 time period. The complaint alleges violations under Israeli securities laws that are similar to U.S. Securities Exchange Act sections 10(b) (and Rule 10b‑5) and 14(e) against all defendants and 20(a) control person liability against the 11 individuals or, in the alternative, under other Israeli securities laws. In general, the allegations in Israel are similar to the factual allegations in the Roofer's case in the U.S. as described above. The plaintiff in this case agreed to stay this case pending the outcome of the Roofer's case in the U.S. (described above). The Israeli Court approved the stay in 2018 by dismissing the action at that time with potential leave to start a new action at a later time.
The 2024 settlement of the Roofer’s class action in the US (discussed above) included recovery for those who purchased Perrigo shares on the Tel Aviv exchange (during the time period discussed in the complaint) or who those who purchased shares on the Tel Aviv exchange and held the shares on the final day of the Mylan tender offer. Perrigo’s Israeli counsel has confirmed with plaintiff’s Israeli counsel that no attempt will be made by the plaintiff to revive this case, so this matter has also ended.
In the United States (cases related to events in 2023-2025)
On November 17, 2025, a purported securities class action complaint was filed against the Company and our current CEO, Patrick Lockwood-Taylor, CFO, Eduardo Bezerra, and former CEO, Murray Kessler, in the U.S. District Court for the Southern District of New York (Tanner French v. Perrigo Company plc, et al., filed 11/17/2025). The plaintiff, an individual shareholder, purports to represent a class of shareholders for the period from February 27, 2023 through November 4, 2025, inclusive. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 based on statements made by the Company and the current and former executives related to our infant formula business and the strategic review of the business announced in November 2025.
The Private Securities Litigation Reform Act of 1995 provides a process for the appointment of a lead plaintiff and lead counsel representing that lead plaintiff. On January 16, 2026, Mr. French and three other alleged shareholders filed motions seeking appointment as lead plaintiff and approval of their selection of lead counsel. Mr. French and one other alleged shareholder withdrew their motions, and another alleged shareholder filed a response stating that it did not oppose the motion of the fourth alleged shareholder. On February 13, 2026, the Court appointed the International Brotherhood of Teamsters Local No. 710 Pension Fund as Lead Plaintiff and approved of Cohen Milstein serving as lead counsel for the proposed class. We intend to defend the lawsuit vigorously.
Other Matters
Talcum Powder
The Company has been named, together with other manufacturers, in product liability lawsuits in a variety of state courts alleging that the use of body powder products containing talcum powder causes mesothelioma and lung cancer due to alleged asbestos contamination of the raw material talc. The majority of these cases involve legacy
talcum powder products that have not been manufactured by the Company since 1999. As of the date of these financial statements, the Company has been named in approximately 290 individual lawsuits seeking compensatory and punitive damages. Nationwide the number of new cases against manufacturers and retailers of talc-containing products alleging injury related to asbestos-contaminated talc has increased. The Company has several defenses and continues to vigorously defend these lawsuits as well as explore various means of expeditiously resolving these claims before trial. Trials for these lawsuits are currently scheduled throughout 2026 and 2027. There are currently over 41 trials set for these cases. The Company continues to evaluate this docket of cases and vigorously defend itself against such claims while exploring resolution of certain of the claims, including through dismissals and settlement. Some of the Company’s retailer customers are seeking indemnity from the Company for a portion of their defense costs and liability relating to these cases.
Ranitidine
After regulatory bodies announced worldwide that ranitidine may potentially contain N-nitrosodimethylamine ("NDMA"), the Company promptly began testing its externally-sourced ranitidine Active Pharmaceutical Ingredients ("API") and ranitidine-based products. On October 8, 2019, the Company halted shipments of those products based upon preliminary results and on October 23, 2019, the Company made the decision to conduct a voluntary retail market withdrawal.
In February 2020, the resulting actions involving Zantac® and other ranitidine products were transferred for coordinated pretrial proceedings to a MDL (In re Zantac®/Ranitidine Products Liability Litigation, MDL No. 2924) in the U.S. District Court for the Southern District of Florida. The Company successfully moved to dismiss the first set of Master Complaints in the MDL based on federal preemption, which the Court granted without prejudice.
After the filing of Amended Complaints, on June 30, 2021, the Court again dismissed all claims against the retail and distributor defendants with prejudice and on July 8, 2021, the Court again dismissed all claims against the Company, this time with prejudice. Appeals of these dismissal orders to the U.S. Court of Appeals for the 11th Circuit have been filed. In December 2022, the Court granted in full the brand defendants' Daubert motions, finding that Plaintiffs' causation experts' opinions were unreliable and thus inadmissible. The Court later ruled that it was appropriate to apply the same expert causation standards to the retail and distributor defendants as well as the generic defendants, and the Court thereby ruled that its Daubert decision barring Plaintiffs' expert opinions applied equally to these defendants as well. Thus, the Court's rulings on both federal preemption and scientific causation grounds dismissed all claims against the Company on two independent grounds and are also binding on all claims remaining in the MDL Census Registry. Appeals of these orders have been filed to the 11th Circuit and oral arguments were held on October 10, 2025. The Company continues to vigorously defend itself against such claims at the appellate level.
As noted above, the Company has won multiple motions to dismiss in the MDL. The company has also won motions to dismiss at the state-court level, most recently in Illinois where the Circuit Court granted in full the Company's motions to dismiss based on federal preemption. The Company has also been dismissed from additional state court actions in California, Pennsylvania, Illinois, Ohio, New York, New Jersey, North Carolina, and Maryland. Plaintiffs elected not to appeal any of those state-court dismissals, with the exception of Illinois (where the Company prevailed on appeal). In April 2025, the Company reached a settlement in principle in the Illinois state court lawsuits, including in the sole case on appeal. The pending settlement is for an immaterial amount and is expected to be fully funded by insurance.
Other than the MDL and state court matters that have been dismissed at the trial court level, as of the date of these financial statements, the Company was also named in approximately 190 personal injury lawsuits in the state of California. In November 2024, the Company reached a settlement in principle in each of remaining Ranitidine California state court lawsuits. The pending settlement is for an immaterial amount and is expected to be fully funded by insurance.
In March 2025, a New Mexico state court granted in full Perrigo’s Motion to Dismiss a ranitidine action against the Company by the New Mexico Attorney General based on nuisance and negligence theories for lack of personal jurisdiction. The New Mexico Attorney General did not appeal that decision, which ended the case against the Company. With the dismissal of the New Mexico action, there are no active lawsuits against the Company in respect of ranitidine at the trial court level, in state or federal court.
Some of the Company’s retailer customers are seeking indemnity from the Company for a portion of their defense costs and liability relating to these cases.
Acetaminophen
In October 2022, the Judicial Panel on Multidistrict Litigation consolidated a number of pending actions filed in various federal courts alleging that prenatal exposure to acetaminophen is purportedly associated with the development of autism spectrum disorder (“ASD”) and attention-deficit/hyperactivity disorder (“ADHD”). The acetaminophen MDL is styled In re: Acetaminophen – ASD/ADHD Products Liability Litigation (MDL No. 3043) and is pending before the U.S. District Court for the Southern District of New York. Plaintiffs in the MDL asserted claims against Johnson & Johnson Consumer, Inc. (“JJCI”) and various retailer chains alleging that plaintiff-mothers took acetaminophen products while pregnant and that plaintiff-children developed ASD and/or ADHD as a result of prenatal exposure to these acetaminophen products. As of the date of these financial statements, the Company has not been named as a defendant in any Complaints filed in the MDL. Certain of the Company’s customers have made requests regarding indemnity from the Company for a portion of their defense costs and potential liability. The Company has agreed to cost-sharing arrangements with certain retailer customers.
On December 18, 2023, the MDL court granted in full defendants' motions to exclude testimony of Plaintiffs' general causation expert witnesses, finding Plaintiffs presented no reliable evidence of scientific causation between prenatal ingestion of acetaminophen and ASD or ADHD in children. Final judgment has been entered as to the majority of pending cases with an appeal proceeding in the Second Circuit. A small minority of cases were exempted from the Court’s dismissal to enable Plaintiffs to present an additional expert to be evaluated through a similar process as the larger majority to determine if they can withstand scientific causation through this new expert. However, on July 10, 2024, the Court granted in full defendants' motion to exclude testimony of Plaintiffs' new general causation expert witness in this subset of carve out cases for similar reasons as the Court's December 2023 Order. Final judgment was entered against the Plaintiffs in those carve out cases, which have now been appealed to the Second Circuit. The appeals before the Second Circuit are fully briefed and argument was held on November 17, 2025. Currently, it is not possible to assess reliably the outcome of these cases or reasonably estimate any potential future financial impact on the Company.
There are state court actions pending in California, Illinois and Florida against the manufacturers of Tylenol, and against certain retailer defendants for the sale of store brand acetaminophen. At this time, Perrigo is not named in any state court action, and no state court case has proceeded to trial.
Phenylephrine
In September 2023, the Federal Drug Administration’s ("FDA") Advisory Committee on Nonprescription Drugs issued an advisory opinion calling into question the efficacy of orally administered phenylephrine ("PE") containing products as a nasal decongestant. While the FDA itself has thus far taken no action in response to the Advisory Committee opinion, several putative class action lawsuits were filed asserting various economic injury claims to consumers. These actions were consolidated into a MDL (In re: Oral Phenylephrine Marketing and Sales Practices Litigation, MDL No. 3089), pending before the U.S. District Court for the Eastern District of New York. The Court permitted Plaintiffs to file a streamlined and consolidated bellwether Complaint for purposes of testing the Plaintiffs’ case and enabling briefing on threshold issues. Defendants filed a consolidated Motion to Dismiss and the Court heard oral argument on that motion in September 2024. On October 2024, the Court dismissed in its entirety Plaintiffs’ Streamlined and Consolidated Bellwether Complaint, finding that all of Plaintiffs’ claims regarding PE were preempted by federal law, and further dismissing Plaintiffs’ RICO claims for lack of standing. Final judgment has been entered and a Notice of Appeal of the Court's dismissal to the Second Circuit was filed. Appellate briefing is fully submitted, and oral argument is set for March 4, 2026.
Individual arbitrations involving similar efficacy allegations have also been threatened or initiated against certain retailers in various arbitral forums and are at a preliminary stage. Some of the Company's retail customers are seeking indemnity and defense costs from the Company relating to these cases.
PLD & Conry Litigation
Perrigo Company plc, L. Perrigo Company, and PBM Nutritionals, LLC (collectively, the “Perrigo Defendants”) are defendants in two pending litigations, P&L Development, LLC v. Gerber Products Company, et al. (the “PLD Action”), and Conry, et al. v. Gerber Products Company, et al. (the “Conry Action” and together with the PLD Action, the “Actions”), both of which are pending in the U.S. District Court for the Eastern District of New York. The PLD Action was brought by P&L Development, LLC (hereinafter, “PLD”), and the Conry Action was brought by a proposed class of Store Brand infant formula purchasers. Gerber Products Company (hereinafter, “Gerber”) is a co-defendant in both Actions. The Actions involve allegations that PLD entered into a memorandum of understanding
with Gerber for Gerber to supply PLD with infant formula with which to compete with Perrigo, and that Gerber allegedly repudiated that commitment because of an agreement with the Perrigo Defendants, which unreasonably restrained trade in violation of Section 1 of the Sherman Act. The Actions also involve allegations that the Perrigo Defendants’ acquisition of the Gateway infant formula manufacturing facility from Gerber was anticompetitive. Motions to dismiss some or all claims are pending in both Actions, discovery is ongoing, and no trial date has been set. Initial expert disclosures, including on merits, class, and damages issues, are expected in June 2026. Perrigo intends to continue to vigorously defend itself in both Actions.
Contingencies Accruals
As a result of the matters discussed in this Note, the Company has established a loss accrual for litigation contingencies where we believe a loss to be probable and for which an amount of loss can be reasonably estimated. Except as otherwise discussed for specific matters above, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to inherent uncertainties of litigation. At December 31, 2025, the loss accrual for litigation contingencies reflected on the Consolidated Balance Sheets in Other accrued liabilities was $59.0 million, inclusive of the accrual related to Discontinued Operations. The Company also recorded a recovery receivable reflected on the Consolidated Balance Sheets in Prepaid expenses and other current assets of $26.9 million, inclusive of the recovery receivable related to Discontinued Operations, as of December 31, 2025. The Company’s management believes these accruals for contingencies are reasonable and sufficient based upon information currently available to management; however, there can be no assurance that final costs related to these contingencies will not exceed current estimates, nor any assurance as to the amount of such final costs that may be covered by insurance. In addition, we have other litigation matters pending for which we have not recorded any accruals because our potential liability for those matters is not probable or cannot be reasonably estimated based on currently available information. For those matters where we have not recorded an accrual but a loss is reasonably possible, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to the inherent uncertainties of litigation.
Insurance Coverage Litigation
In May 2021, insurers on multiple policies of D&O insurance filed an action in the High Court in Dublin against the Company and multiple current and former directors and officers of the Company seeking declaratory judgments on certain coverage issues. Those coverage issues include claims that policies for periods beginning in December 2015 (the "2015 Policy") and December 2016 (the "2016 Policy"), respectively, do not have to provide coverage for the securities actions described above pending in the District of New Jersey or in Massachusetts state court concerning the events of 2015-2017. The insurers on the policy period beginning December 2014 (the "2014 Policy") then provided coverage for those matters. However, if the insurers were successful, the total amount of insurance coverage available to defend such lawsuits and to satisfy any judgment or settlement costs thereunder would be limited to one policy period. The insurers’ lawsuit also challenged aspects of coverage for Krueger derivatively on behalf of nominal defendant Perrigo Company plc v. Alford et al., a prior derivative action filed in the District of New Jersey that was dismissed in August 2020. Perrigo responded in the High Court proceedings on November 1, 2021; Perrigo’s defense and counterclaim included its position that the 2015 Policy and 2016 Policy also provide coverage for the underlying securities litigation matters and sought a ruling to that effect. The discovery stage of the case occurred in 2022, and a bench trial was held in mid-November 2023. In January 2024, the High Court delivered its judgment rejecting the insurers' position that Perrigo's insurance coverage is limited to the 2014 Policy. The High Court held additional hearings in April and July 2024 to hear the parties' submissions concerning under which of the 2014, 2015, and 2016 Policies Perrigo is entitled to coverage. The High Court delivered written judgments in January, May and July 2024, finding that coverage is available to Perrigo under each of the 2014 Policy, 2015 Policy and 2016 Policy. On October 18, 2024 the Court issued its final order on its three judgments, and the parties filed cross appeals of those three judgments in November and December 2024. On December 18, 2024, the parties reached a settlement providing for the full and final settlement of the insurance coverage litigation. Prior to the end of 2024, the Company received the insurers' $98 million payment in full satisfaction of the insurers' remaining liability under each of the policies in question, and the parties dismissed their cross appeals previously filed in the High Court litigation. The full amount was recorded as income within Other operating (income) expense, net on the Consolidated Statement of Operations for the year ended December 31, 2024.
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.