Michael Gribe, derivatively on behalf of Vestis Corporation v. Kimberly Scott, et al.

District Court, N.D. Georgia·Decided August 18, 2026·No. 1:25-cv-02726·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

MICHAEL GRIBE, derivatively on

behalf of Vestis Corporation,

Plaintiff,

v. CIVIL ACTION FILE

NO. 1:25-CV-2726-TWT KIMBERLY SCOTT, et al.,

Defendants.

OPINION AND ORDER This is a shareholder derivative action. It is before the Court on Consol Plaintiffs Bruce Harms and Thomas Dove’s Motion to Vacate the Leadership Order and Motion to Enter a Scheduling Order [Doc. 13], the Consol Plaintiffs’ Motion to Strike Plaintiff Michael Gribe’s Response Brief to the Motion to Vacate [Doc. 19], the Plaintiff’s Motion to Strike the Consol Plaintiffs’ Reply Brief for the Motion to Vacate and Motion for Leave to File Surreply [Doc. 27], the Plaintiff’s Motion for Leave to File Notice of Subsequent Developments [Doc. 28], the Plaintiff’s Motion for Leave to File Notice of Subsequent Developments [Doc. 30], and the Plaintiff’s Motion for Leave to File Notice of Supplemental Authorities [Doc. 34]. For the reasons set forth below, the Consol Plaintiffs’ Motion to Vacate the Leadership Order and Motion to Enter a Scheduling Order [Doc. 13] is GRANTED, the Consol Plaintiffs’ Motion to Strike the Plaintiff’s Response Brief to the Motion to Vacate [Doc. 19] is DENIED, the Plaintiff’s Motion to Strike the Consol Plaintiffs’ Reply Brief for the Motion to Vacate and Motion for Leave to File Surreply [Doc. 27] is GRANTED in part and DENIED in part, the Plaintiff’s Motion for Leave to

File Notice of Subsequent Developments [Doc. 28] is GRANTED, the Plaintiff’s Motion for Leave to File Notice of Subsequent Developments [Doc. 30] is GRANTED, and the Plaintiff’s Motion for Leave to File Notice of Supplemental Authorities [Doc. 34] is GRANTED. I. Background This case arises out of a purported breach of fiduciary duties by the directors and officers of Vestis Corporation (“Vestis”) between October 2023

and May 2024. ( Compl. ¶ 1 [Doc. 1]). The Plaintiff Michael Gribe is a shareholder of Vestis. The relevant directors and officers employed by Vestis are Defendants Kimberly Scott, Rick Dillon, Phillip Holloman, Richard Burke, Tracy Jokinen, Lynn McKee, Doug Pertz, Mary Anne Whitney, and Ena Williams (collectively, the “Individual Defendants”). ( ¶¶ 21, 23, 25, 27, 29, 31, 33, 35, 37).

A. The Complaint’s Allegations Vestis is an independent public company that is the product of a September 2023 separation of Aramark Uniform Services (“AUS”) from Aramark, a global provider of food and facilities services. ( ¶ 2). Before this separation, AUS provided rental uniforms and workplace supplies and

2 services. ( ). Vestis provides those same services now. ( ). In October 2023, Vestis’s common stock began trading on the New York Stock Exchange (“NYSE”) under the symbol “VSTS.” ( ¶ 3). It is now a leading provider of

uniform retails and workplace supplies across the United States and Canada to more than 300,000 locations across several industries. ( ). Before Vestis began trading on the NYSE, Vestis executives held an inaugural “Vestis Analyst Day” call.” ( ¶ 4). During this call, Defendant Scott, Vestis’s incoming Chief Executive Officer, characterized Vestis as a growth business, stating that there would be between a 5-7% top-line growth in the Compound Annual Growth Rate (“CAGR”).1 ( ). In addition, certain

Individual Defendants specified three areas of Vestis that would drive growth, including the ability to raise prices. ( ¶ 5). Defendant Dillon, the incoming Chief Financial Officer asserted that they have demonstrated their “ability to take price.” ( ). Otherwise, the Individual Defendants used the analyst day call to depict Vestis in an extraordinarily bullish fashion, with Defendant Scott

1 The “Compound Annual Growth Rate,” also known as CAGR, is “the rate of return that an investment would need to have every year in order to grow from its beginning balance to its ending balance, over a given time interval.” Jason Fernando, , Investopedia (Aug. 10, 2026). The CAGR is not a true return rate but rather describes “the rate at which an investment would have grown if had grown at the same rate every year and the profits were reinvested at the end of each year.” “For stock market investors, this can be particularly useful in comparing the performance of different stocks.” 3 stating that “investments are in place, they’ve been made, they’re in our run rate.” ( ¶ 6). After the call, the Individual Defendants continued to wax lyrical on

Vestis’s future prospects. ( ¶ 7). In February 2024, Vestis filed a current report on Form 8-K with the Securities and Exchange Commission (“SEC”), which stated that Vestis was expected to continue delivering revenue growth between 4% to 4.5% and an EBITDA2 margin of approximately 14.3%. ( ¶ 8). Vestis held an earnings conference call later that same day, where Defendant Scott stated that she expected growth rates to follow similar patterns from prior years and that she sees an opportunity for additional

pricing actions later in the year. ( ). The reality was much different. Vestis suffered from outdated facilities and an underperforming sales force because Aramark had severely underinvested in AUS before creating Vestis. ( ¶ 9). Accordingly, Vestis experienced “service gaps” before and after the separation that prevented the company from executing the growth plan presented by the Individual

2 The full form of the acronym EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. ( ); Adam Hayes, , Investopedia (Aug. 10, 2026). “EBITDA can be used to track and compare the underlying profitability of companies regardless of their depreciation assumptions or financing choices.” Adam Hayes, , Investopedia (Aug. 10, 2026). 4 Defendants to the public. ( ). This underlying issue began to affect Vestis’s projections. ( ¶ 10). Indeed, in May 2024, Vestis issued a press release that reported the

Company’s financial performance for the second quarter of the 2024 fiscal year, which contained a revised financial outlook for 2024 that projected Vestis’s 2024 revenue growth to be in the range of -1% to 0%. ( ).3 On an earnings conference call held later that same day, Defendant Scott detailed certain challenges facing Vestis relating to sales productivity and deliberate moderated pricing actions. ( ). Defendant Scott further stated that Vestis made the recent and deliberate decision to moderate pricing actions for the

remainder of the fiscal year in order to “realize improved retention while [Vestis] enhance[s] [their] services processes.” ( ). This, as Defendant Scott acknowledged, would impact their revenue and EBITDA in the second half of the year but the decision was necessary since she acknowledged that more than 70% of the customer cancellations were due to causes within Vestis’s control. ( ). The news immediately impacted the share price of VSTS on the NYSE.

3 Within the Complaint, the Plaintiff actually writes that the truth emerged on May 2, 2022 instead of May 2024. ( ). This makes little sense because the Plaintiff has written his Complaint chronologically and the rest of the paragraph discusses Fiscal Year 2024. ( ). Accordingly, for the purposes of this background section, the Court gives the Plaintiff the benefit of the doubt that the date was a clerical error, especially when this detail poses little relevance to the underlying motions before the Court. 5 The night before the announcement, VSTS was priced at $18.47 per share. ( ¶ 11). After the announcement, the price of a share of VSTS dropped by 45% to close at $10.16 per share. ( ).

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Michael Gribe, derivatively on behalf of Vestis Corporation v. Kimberly Scott, et al., (N.D. Ga. 2026).

Michael Gribe, derivatively on behalf of Vestis Corporation v. Kimberly Scott, et al. (Michael Gribe, derivatively on behalf of Vestis Corporation v. Kimberly Scott, et al.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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