Appvion celebrates 115 years Oct. 18, 2022. (Photo courtesy Appvion)
APPLETON, WI (WTAQ-WLUK) – A state appeals court rejected an attempt by members of the Appvion Employee Stock Ownership Plan to recover damages after a bankruptcy filing. Meanwhile, another related lawsuit is scheduled to go to trial next year.
Members of ESOP, about 90% of the employees, lost all value in their accounts when Appvion – formerly Appleton Papers – and its parent company, Paperweight Development Corp., filed for bankruptcy in October 2017.
The ESOP filed suit, claiming that PricewaterhouseCoopers – which audited the financial statements of Appvion and PDC from 2001 to 2014 – was negligent for failing to uncover fraud, and misrepresenting the company’s value. A circuit court ruled because PricewaterhouseCoopers was not the ESOP’s auditor, it was not reasonably foreseeable that the ESOP would have relied on PricewaterhouseCoopers’ audit opinions to fairly state the value of Appvion’s stock.
In a 25-page decision issued Tuesday, the appeals court upheld the lower court ruling.
“In summary, PwC, which had no professional or contractual relationship with the ESOP, would have no basis to know or reasonably foresee that the ESOP would rely on PwC’s audit opinions to make decisions about the fairness and accuracy of Appvion’s stock purchase price that the ESOP’s own trustee and independent appraiser had set. Under these circumstances, we agree with the circuit court’s conclusion,” the ruling states.
Separately, some workers filed a federal lawsuit in 2018 seeking reimbursement of the funds they lost. Court records show a Feb. 8, 2027 trial is scheduled in that case.
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