Graphic Packaging (GPK) told investors it had a resilient business model, stable margins, manageable inventory, and substantial cash-flow potential, according to the lawsuit. But the complaint alleges that, behind those assurances, the company was facing significant inventory-management problems, weakening demand, rising costs, and pressure on its financial outlook.
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A federal securities lawsuit filed against Graphic Packaging Holding Company and two of its former top executives alleges that investors were kept in the dark about worsening inventory problems, declining demand, and rising costs, even as company leadership publicly touted the strength of its business model.
The complaint, filed in the United States District Court for the Southern District of New York on May 7, 2026, covers purchases of Graphic Packaging (NYSE: GPK) securities between February 4, 2025, and February 2, 2026. During that span, the complaint alleges that Graphic Packaging’s stock fell more than 15% on May 1, 2025, following a significant guidance cut, fell an additional 8.66% on December 9, 2025, after the company announced accelerated production curtailments and the departure of its CEO, and declined another 15.97% on February 3, 2026, after disappointing fourth quarter results and a sharply reduced 2026 outlook.
Investors who purchased or otherwise acquired GPK securities during the Class Period are encouraged to explore their legal options.
Graphic Packaging: A Consumer Packaging Business Under Pressure
Graphic Packaging Holding Company is a Delaware corporation headquartered in Atlanta, Georgia. According to the complaint, Graphic Packaging is a consumer-packaging company that makes and sells packaging products for customers in industries such as food, foodservice, beverage, household goods, and other consumer products. The complaint further alleges that the company serves customers across the Americas, Europe, and the Asia Pacific region through its own sales offices and third-party broker relationships.
According to the complaint, Graphic Packaging was navigating a challenging operating environment during the Class Period, including what its own CEO described as “unusual volume challenges for the industry and our customers” over the prior two years. Customer destocking and consumer pressure from inflation had weighed on volumes, and the company was simultaneously managing a major capital investment at its Waco, Texas, recycled paperboard mill. These conditions, the lawsuit alleges, made inventory management, demand visibility, and cost control critically important to meeting the company’s financial targets.
What the Lawsuit Alleges: Alleged Misrepresentations About Inventory, Demand, and Guidance
The lawsuit alleges that throughout the Class Period, Graphic Packaging and its senior executives made materially false and misleading statements about the company’s business condition, financial outlook, and ability to manage inventory and costs. Specifically, the complaint contends that defendants failed to disclose that the company was experiencing significant inventory management problems, meaningfully reduced demand and volume, and increased costs, all of which allegedly had a material negative impact on its financial results.
The complaint further alleges that defendants overstated the strength and sustainability of the company’s business model, downplayed the true scope of the challenges facing the company, and issued FY 2025 financial guidance that was unreliable or unrealistic given what they purportedly knew at the time. Despite acknowledging market headwinds in public statements, management repeatedly characterized the business as generating results that were “strong and steady” and capable of navigating challenging market conditions, statements the lawsuit characterizes as misleading given the alleged undisclosed realities.
Investors who purchased or otherwise acquired GPK securities during the Class Period are encouraged to explore their legal options.
What Management Said: Statements Cited in the Complaint
The complaint quotes extensively from statements made by former President and CEO Michael P. Doss and former Executive Vice President and CFO Stephen R. Scherger during earnings calls, press releases, and SEC filings. In February 2025, Doss stated that the company had “demonstrated the value of the Graphic Packaging business model” and would “build on that success” in 2025, delivering consistent and profitable results. When analysts raised questions about rising inventory levels on that same February 2025 earnings call, Doss described the inventory build as intentional and said it would resolve itself quickly as the Waco mill came online.
Following the May 2025 guidance cut, Doss continued to characterize the challenges as manageable and near-term, while Scherger told analysts the company was committed to running to demand and aggressively matching supply to customer requirements for the remainder of the year. As late as July and November 2025, both executives made statements to investors characterizing inventory management progress as on track and the company as executing well, even as conditions continued to deteriorate, according to the complaint. The complaint also references signed Sarbanes-Oxley certifications filed with the SEC in which the Individual Defendants certified that the company’s annual and quarterly reports did not contain materially false or misleading statements.
Corrective Disclosures: How the Alleged Truth Emerged
The complaint identifies three separate disclosures that it characterizes as partial revelations of the truth. The first came on May 1, 2025, when Graphic Packaging reported first-quarter 2025 results showing non-GAAP EPS of $0.51, missing consensus estimates by $0.07, and revenue of $2.12 billion, down 6.2% year over year and below estimates. The company simultaneously cut its full-year 2025 adjusted EBITDA guidance range from $1.68 billion to $1.78 billion down to $1.4 billion to $1.6 billion, and reduced its adjusted EPS outlook from $2.53 to $2.78 down to $1.75 to $2.25, citing a projected 2% volume decline, $80 million in input cost inflation, and elevated macroeconomic uncertainty. Graphic Packaging’s stock fell $3.94 per share, or approximately 15.57%, to close at $21.37 that day.
The second disclosure came on December 8, 2025, when Graphic Packaging announced it would accelerate inventory reduction plans into the fourth quarter that had originally been scheduled for 2026, with associated production curtailments expected to impact Q4 operating results by $15 million, on top of a previously announced $15 million impact. The company further reduced its FY 2025 guidance and separately announced that Doss had agreed to step down as President and CEO, effective December 31, 2025, with shares falling by $1.35, or approximately 8.66%, the following trading day. The third disclosure, on February 3, 2026, brought fourth quarter results showing non-GAAP EPS of $0.29, again missing estimates, along with a 2026 adjusted EBITDA outlook of $1.05 billion to $1.25 billion, substantially below analyst expectations and driven in part by a $130 million negative impact from inventory reduction actions, sending the stock down another $2.36, or approximately 15.97%.
Why This Case Matters for Graphic Packaging Shareholders
The lawsuit argues that investors who purchased GPK shares during the Class Period did so at prices allegedly inflated by the misrepresentations described in the complaint, and that they suffered financial losses when the alleged truth emerged through the three corrective events. Across the three pleaded corrective events, the complaint identifies separate stock-price declines of 15.57%, 8.66%, and 15.97%.
The complaint also alleges that both individual defendants sold significant amounts of company stock during the Class Period while the alleged misstatements were ongoing, with Doss selling nearly 1.6 million shares for proceeds exceeding $7 million and Scherger selling 65,529 shares for approximately $1.8 million. Additionally, the complaint notes that newly appointed CEO Robbert Rietbroek, who took over on January 1, 2026, almost immediately announced a comprehensive review of the company’s organization, operations, and footprint, a development the plaintiff characterizes as confirming the weakness of the prior business model.
Legal Claims: Federal Securities Laws at Issue
The lawsuit brings two counts under the Securities Exchange Act of 1934. Count I, asserted against all defendants, alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5, which prohibit fraudulent or misleading statements in connection with the purchase or sale of securities. The plaintiff alleges that defendants knowingly or recklessly made untrue statements of material fact and omitted information necessary to make their statements not misleading, in connection with the purchase and sale of Graphic Packaging securities.
Count II, asserted against the Individual Defendants only, alleges violations of Section 20(a) of the Exchange Act, which imposes liability on individuals who control a company that has committed a primary securities law violation. The plaintiff contends that Doss and Scherger, by virtue of their senior executive positions and authority over Graphic Packaging’s public communications, are liable as controlling persons for the alleged primary violations.
Investors who purchased GPK securities between February 4, 2025, and February 2, 2026, and sustained losses are encouraged to learn more about their legal rights.
About Levi & Korsinsky, LLP
Levi & Korsinsky, LLP is a nationally recognized securities litigation firm representing investors in complex shareholder actions. The firm has extensive expertise and a team of over 70 employees to serve our clients. Attorney advertising. Prior results do not guarantee similar outcomes.
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