On September 30, 2025, Saxena White secured a major victory with a significant decision issued by the Honorable Steven D. Grimberg of the Northern District of Georgia, in Plumbers, Pipefitters and Apprentices Local No. 112 Pension Fund v. Vestis Corporation et al., No. 1:24-cv-SDG (N.D. Ga.), in which Judge Grimberg denied the majority of Defendants’ motions to dismiss Lead Plaintiffs’ amended complaint. As described by Judge Grimberg, “this securities fraud case arises out of the steep fall in value of Vestis less than a year after it spun off as an independent entity from Aramark. The complaint alleges that Vestis, a uniform-rental and workplace-supply services company, was troubled from before its inception by systemic customer service and retention problems—problems that were hidden from investors during the spinoff, and, when those problems were eventually revealed, caused Vestis’s stock price to fall nearly 50%.”

Based in Roswell, Georgia, Vestis is a provider of uniforms and workplace supplies in the United States and Canada.  The Company was created through its September 30, 2023 spinoff from food services and facilities management provider Aramark.  Vestis began trading on the New York Stock Exchange on October 2, 2023—the first day of the Class Period—under the ticker symbol “VSTS.”

In the Court’s order denying Defendants’ motion to dismiss, Judge Grimberg sustained every false statement alleged in the amended complaint as materially false and misleading, finding “that Defendants made optimistic statements about the prospects of Vestis’s business while failing to include past performance information that would have been useful to reasonable investors in assessing whether those statements truly reflected Vestis’s customer-retention prowess, its service-delivery capabilities, and its underlying financial health.” Judge Grimberg agreed with Plaintiffs’ that the statements were clearly material to investors and could not be considered inactionable puffery, emphasizing that “[i]t is self-evident that the alleged statements were made at too pivotal of a moment (during the spinoff), about topics too essential to Vestis’s business (customer service and retention), to be ruled immaterial to all reasonable investors as a matter of law.” Judge Grimberg held that Defendants’ representations during the pre-spinoff Analyst Day and subsequent earnings calls “could mislead a reasonable investor into believing that Vestis was profiting from its recurring-revenue business model by delivering excellent service to loyal customers, when in truth and in fact Vestis was doing the opposite.”

The Court further concluded that Lead Plaintiffs sufficiently alleged Defendants’ fraudulent intent, or scienter, against all but one Defendant, Aramark CEO John J. Zillmer. Judge Grimberg held that the allegations establish that Vestis’s CEO Kimberly Scott and CFO Rick Dillon “knew how fundamental service failures were costing Vestis millions of dollars in recurring revenue every week, but hid the truth from investors until plummeting revenues forced them to come clean.” Among other things, Judge Grimberg emphasized that Scott and Dillon admitted that pre-spinoff customer losses were known and continued to depress revenue, contradicting their earlier public statements about “nonregrettable” losses and “very intentional” strategic exits. The timing of these statements—during Vestis’s “most critical period” leading up to the spinoff—combined with Scott and Dillon’s roles in preparing Vestis for its independence from Aramark, supported a strong inference of scienter. Judge Grimberg highlighted that internal reports from Plaintiffs’ confidential witness showed that serious retention issues were circulated weekly to Scott’s direct subordinate, and that Scott personally intervened in efforts to retain major accounts. The Court also found that the $1.5 billion payment from Vestis to Aramark created a plausible motive to inflate Vestis’s value. Collectively, Judge Grimberg held that these allegations supported the inference that Scott and Dillon “knew they were painting a rosy picture of Vestis’s business inconsistent with its actual performance.”

The case will now proceed to the discovery phase.