Benpac ordered to pay $22M to American Tool & Mold in failed acquisition suit

A Florida judge has ordered Benpac Holding Inc. to pay $22 million to Clearwater-Fla.-based mold maker and injection molder American Tool & Mold Inc. (ATM) for breaching a settlement agreement related to a failed acquisition in 2019.

ATM CEO Emilia Giannakopoulos said the legal victory concluded a profound emotional journey for the owners of the company founded in 1978 by her father, a Greek immigrant, who built it up to serve major customers like Purell.

When she learned of the March 9 court order, Giannakopoulos, a mechanical engineer who had been working in the family business since she was 15, said: "That day I had the most uplifting feeling. It brought everything to a full circle."

The second-generation owner said she can now focus on $5 million in recent investments, including a prototype division and new certifications, while she looks for other companies to acquire.

"I just sent purchase orders for new injection molding machines and the robots that go with them," Giannakopoulos said. "My goal is to grow us to the next level and to keep buying other companies — even sub-specialties that are cutting edge. That's where we're at."

The ruling came from Sixth Judicial Circuit Circuit Judge Keith Meyer. He ordered New York-based Benpac to pay $21.9 million in damages and $130,000 in legal fees to a seller group made up of ATM founder Demetre Loulourgas and his family.

Benpac Holding and other Benpac businesses are part of Stans, Switzerland-based Benpac Group, which is run by CEO Marco Corvi.

Benpac officials had planned to buy ATM and several other U.S. and Canadian companies that offer packaging solutions such as manufacturing, filling and labeling, for the personal care, beverage, household products and pharmaceutical markets.

To that end, Benpac bought Pelco Tool & Mold Inc. near Chicago and then in January 2020, W. Amsler Equipment Inc. in Bolton, Ontario. After that, they tried for injection molding machine maker Niigon Machines Ltd. in Vaughn, Ontario.

However, Niigon closed down as consummation of the deal dragged on and the company eventually ended up in bankruptcy.

In the meantime, Benpac officials were seeking more than a dozen payment extensions from ATM on an acquisition initiated in July 2019. The family of sellers then turned to the courts and won.

It wasn't an easy point to reach.

The Loulourgas seller group and Benpac originally entered into a purchase agreement in July 2019. A few months later it was modified. Benpac made a down payment of $10 million in January 2020, but failed to close. This violated the agreement, resulting in a breach of contract.

The sellers advised Benpac in January 2021 that the purchase agreement was void pursuant to a provision in the modified agreement and that they intended to resume operations and management on Feb. 1, 2021.

Benpac officials then asked for extensions and the sellers granted 14. But payments still weren't made.

A quiet transition of the business then was made back to the seller group later in November 2021 with Giannakopoulos at the helm.

At the same time, the new CEO faced of couple years of legal wrangling to fully regain control.

"It was very hard," Giannakopoulos said. "But at the end of the day, we had amazing counsel. He guided the family to do things properly without emotion."

The case was heading to a non-jury trial but the defense wasn't responding. Plaintiff's attorney Bret Feldman then asked the judge to enter a final default judgment of $21.9 million plus legal fees in favor the sellers.

Benpac's CEO tried to intercede. Corvi sent a Feb. 19, 2023, letter to the court submitting testimony from a psychiatrist that he was not fit to be questioned or participate in a court hearing.

"The psychic pain that I have suffered as a result of the ATM-Loulourgas case is so severe that I have not been able to work for months," Corvi wrote to the court.

Feldman said the court took Corvi's letter and all facets of the case into consideration.

"ATM and the Loulourgas family won. The judge listened carefully to the evidence and ruled in our favor, saying yes, you're entitled to recover money from Benpac and gave us an award of $22 million and change," Feldman said in a phone interview.

The family gave Corvi every opportunity, Giannakopoulos added.

"We felt good at the end about that decision. We did absolutely nothing wrong," she said.

The Loulourgas family has returned with renewed passion for the 45-year-old company.

Under the leadership of Giannakopoulos, ATM has invested about $5 million into new technology, acquired several certifications (ISO 9001, ISO 13485 and ITAR), picked up government contracts for aerospace, and launched an in-house prototyping division called ATM-X.

The division can mold up to 5,000 small parts in seven to 10 days after design approval.

"Large tool establishments like ours usually are not equipped to do prototyping but we have successfully segregated that and created a division," Giannakopoulos said.

The company has about 160 employees who are embracing the latest changes, she added.

"I'm very fortunate and very blessed with this team," Giannakopoulos said. "I think we have evolved. Everyone is so motivated and excited. The heart of ATM beats strong."

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