Willkie Secures Dismissal of Appvion ESOP Federal Lawsuit

July 31, 2020

Chicago-based team represents more than 30 former officers and directors, as well as certain of their spouses, as defendants; alleged damages totaled approximately $800M.

Willkie successfully obtained dismissal in a federal lawsuit brought against a group of more than 30 former officers and directors, as well as certain of their spouses, of Appvion Corporation, the successor to a large Wisconsin paper manufacturing company. The lawsuit, in the US District Court for the Eastern District of Wisconsin, alleged that the company executives persuaded employees to put retirement funds into stock in Appvion's parent company, Paperweight Development Corp., artificially inflating the company’s stock value through improper business forecasts, stock valuations and calculations.

The case was brought by the ESOP (employee stock ownership plan) Committee, alleging damages totaling approximately $800 million. The ESOP Committee also argued the former officers and directors and other defendants breached their ERISA-based fiduciary duties and violated other state and federal laws, resulting in the company’s bankruptcy and the ESOP’s ultimate demise.

The Willkie litigation team representing the defendants in this case was led by Craig C. Martin and includes partner Amanda Amert, counsel Michael Graham and associate Sara Kim. All are based in Willkie’s recently launched Chicago office.