Why This Matters to Distributors: Amax, Crayola and Teh Tung have sued Essendant over contract disputes since Aug. 21, adding to the pressure on the national wholesaler as it seeks additional capital or asset transactions to avoid liquidation.
Essendant is facing a new round of vendor lawsuits as the national wholesaler tries to secure additional capital or sell assets to avoid liquidation.
Amax Inc., Crayola LLC, and Teh Tung Corp. sued Essendant between Aug. 21 and Aug. 28, according to federal court records. All three accuse Essendant of failing to meet contractual obligations.
The newest case was filed Friday, Aug. 28, by Amax, a manufacturer and distributor of office products, tools, and consumer goods whose brands include Bostitch, PaperPro, Stanley and Black+Decker office products.
Distribution Strategy Group continues to reach out to Essendant for comment on its financial condition, restructuring efforts and the vendor lawsuits and has yet to hear back.
The lawsuits come as Essendant has told government agencies it is considering transactions involving some of its assets and operations and seeking additional capital to avoid liquidation. The company has warned those efforts may not succeed and that it currently expects to cease operations and close the business if it cannot find another solution.
The three lawsuits filed within eight days add another complication as Essendant works to stabilize its business.
Amax Files Newest Case
Amax sued Essendant on Aug. 28 in U.S. District Court in Massachusetts. According to the federal court docket, Amax’s filing includes its vendor agreement with Essendant, past-due invoices and a demand letter to the wholesaler.
The Amax lawsuit is the newest of the three contract cases filed against Essendant in August.
Crayola sued Essendant on Aug. 21 in U.S. District Court in Chicago. The Easton, Pennsylvania-based company manufactures crayons, markers, paints, modeling compounds and other art and creative products. Crayola has been owned by Hallmark Cards since 1984.
According to federal court records, Crayola accuses Essendant of breaching its contract with the company and has requested a jury trial.
Teh Tung filed a separate lawsuit against Essendant in Chicago the same day.
Teh Tung is an international manufacturer and supplier of paper towels, tissues, napkins, dispensers, trash can liners, gloves, and custodial products. Its products are sold into janitorial and sanitation, disposable-products, and retail markets, making the company particularly relevant to Essendant’s current focus on janitorial and sanitation products.
Teh Tung says it operates seven warehouse and distribution facilities in the U.S. and Asia and supplies both branded and private-label products.
Its filing against Essendant includes invoices, an email and a spreadsheet as supporting documents, according to federal court records. Teh Tung also requested a jury trial.
The three August cases follow an earlier contract dispute involving Essendant and ECI Software Solutions Inc.
ECI is a business software company providing enterprise resource planning and other industry-specific software to small and midsize businesses. Its operations include technology specifically serving office-products dealers and distributors.
ECI sued Essendant on March 4 in U.S. District Court in Chicago, alleging the wholesaler failed to pay $125,000 associated with unused software development hours and improperly attempted to end an existing agreement.
According to ECI’s complaint, the companies had a long-standing relationship in which ECI provided technology that enabled independent dealers to place orders through Essendant’s wholesale platform.
ECI alleges Essendant had committed to a minimum annual purchase equivalent to 1,500 development hours. The software company says 625 unused hours expired at the end of 2024, resulting in a $125,000 payment obligation.
ECI says it invoiced Essendant for $270,200 on Dec. 31, 2025, including the disputed $125,000.
Essendant disputes ECI’s interpretation of the agreement and has challenged part of the company’s case. No court has ruled that Essendant owes the disputed $125,000.
The ECI case means Essendant is facing contract disputes brought by at least four companies this year, with three of those lawsuits filed during an eight-day period in August.
The timing is significant because the new vendor disputes are surfacing as Essendant confronts a much larger financial challenge.
The wholesaler has told government agencies it is pursuing potential transactions involving assets and operations while seeking additional capital to avoid liquidation. Essendant has said it does not know whether those efforts will succeed.
The financial pressure marks a sharp turn from the strategy Essendant was communicating to customers earlier this year.
As part of what it called its “New Way Forward,” Essendant said it was exiting the traditional office products market and concentrating on janitorial and sanitation, foodservice and technology products. It outlined a distribution network centered on six major hubs in Dallas, Atlanta, Chicago, Oaks, Pennsylvania, Phoenix, and Sacramento.
Essendant said at the time that the changes were intended to create a stronger and more efficient distribution network. Its more recent warnings present a substantially different outlook.
Against that backdrop, the vendor lawsuits add another challenge for Essendant as it seeks financing, asset transactions or another solution that would allow the business to continue operating.
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