Appvion ESOP Fails to Recover Funds from Auditors

A Wisconsin state appeals court rejected claims by Appvion Employee Stock Ownership Plan members seeking damages following the company's 2017 bankruptcy. Approximately 90% of employees lost all ESOP account value when Appvion, formerly Appleton Papers, and parent Paperweight Development Corp. filed for bankruptcy in October 2017.​

The ESOP sued PricewaterhouseCoopers, which audited Appvion and PDC financial statements from 2001 to 2014, alleging negligence in failing to detect fraud and misrepresenting company value. A circuit court ruled PwC lacked a direct auditor relationship with the ESOP, making ESOP reliance on PwC opinions unforeseeable for stock valuation purposes.​

The appeals court upheld this in a 25-page decision issued Tuesday, stating PwC had no professional or contractual ties to the ESOP and no basis to anticipate ESOP dependence on its audits over the ESOP's own trustee and independent appraiser valuations.​

Separately, a 2018 federal lawsuit by some workers seeking lost fund reimbursement heads to trial on February 8, 2027.