7th Circ. Revives Stock Suit Against Ex-Appvion Execs

By Emily Brill (July 28, 2021, 10:05 PM EDT) -- A Seventh Circuit panel revived litigation accusing the ex-leaders of the bankrupt paper company Appvion of overvaluing the business's stock to line their own pockets, saying Wednesday that the Employee Retirement Income Security Act doesn't preempt state-law misconduct claims against the former directors and officers.

The three-judge panel ruled that ERISA doesn't block all state-court lawsuits accusing executives of wrongdoing related to a benefit plan, reviving claims that Appvion's former directors and officers violated Wisconsin law by overvaluing the company's stock. The stock was wholly held by Appvion workers through an employee stock ownership plan.

Rather, the federal benefits law allows...

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