I have a similar issue running sudo update-grub returns the following:
Generating grub configuration file ...
Found background image: Abc.png
Found linux image: /boot/vmlinuz-4.4.0-38-generic
Found initrd image: /boot/initrd.img-4.4.0-38-generic
Found linux image: /boot/vmlinuz-4.4.0-36-generic
Found initrd image: /boot/initrd.img-4.4.0-36-generic
Found linux image: /boot/vmlinuz-4.4.0-34-generic
Found initrd image: /boot/initrd.img-4.4.0-34-generic
Found linux image: /boot/vmlinuz-4.4.0-31-generic
Found initrd image: /boot/initrd.img-4.4.0-31-generic
Found linux image: /boot/vmlinuz-4.4.0-28-generic
Found initrd image: /boot/initrd.img-4.4.0-28-generic
Found linux image: /boot/vmlinuz-4.4.0-24-generic
Found initrd image: /boot/initrd.img-4.4.0-24-generic
rmdir: failed to remove '/var/lib/os-prober/mount': Device or resource busy
rmdir: failed to remove '/var/lib/os-prober/mount': Device or resource busy
rmdir: failed to remove '/var/lib/os-prober/mount': Device or resource busy
rmdir: failed to remove '/var/lib/os-prober/mount': Device or resource busy
Found Windows 10 (loader) on /dev/sda1
Found elementary OS 0.4 Loki (0.4) on /dev/sda10
Found Linux Mint 18 Sarah (18) on /dev/sda11
Found Windows 10 (loader) on /dev/sda2
Found Arch on /dev/sda9

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https://bugs.launchpad.net/bugs/1046860

Title:
  during kernel upgrade: rmdir: failed to remove `/var/lib/os-
  prober/mount': Device or resource busy

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