CANTON, N.C. (From news reports) -- Pactiv Evergreen is suing the potential purchaser of its Canton paper mill property, trying to force the sale to completion and saying the purchase agreement remains legally binding.

That purchaser, E.J. Spirtas Group and Two Banks Development, backed away from closing the sale on the Canton site immediately following record flooding by Hurricane Helene on Sept. 27. Now Pactiv Evergreen has turned to the courts to ensure the terms of the purchase agreement are followed.

The complaint was filed in Delaware against Two Banks Development, LLC and E.J. Spirtas Group, LLC.

Two Banks is a corporation formed by Spirtas owner Eric Spirtas as part of the purchase and development of the mill property.

Pactiv Evergreen also operates under the name Blue Ridge Paper Products, the company it purchased that was the former owner of the Canton mill.

"Spirtas first notified Pactiv Evergreen on Sept. 26 that they refused to close without major changes to the fully negotiated and signed agreement," Pactiv Evergreen wrote. "We are pursuing all legal avenues to enforce our rights to ensure Spirtas fulfills their obligations to complete this transaction."

By Thursday, Sept. 26, in Haywood County, water levels were rising as Hurricane Helene was zeroing in on Western North Carolina, with the majority of rain falling through the night. Around midday Friday the Pigeon River broke all flood records, engulfing much of Canton and most all of the paper mill property.

Photos of the mill appear to indicate the September 2024 storm has damaged the property, including the wastewater treatment plant. Almost two weeks after the storm, that treatment plant is not operating properly.

The legal complaint alleges Two Banks/Spirtas agreed to purchase the Canton Mill site and assets on an "as -is, where-is" basis.

"To Blue Ridge's shock and dismay, just days before the deal was to close, defendants began making a series of evolving and baseless arguments to back out of the contract ...," the document states.

The suit refers to a Sept. 26 letter from Two Banks that indicated a 50% reduction in the purchase price would be needed for the sale to go through.

"Two Banks argued that it should receive this reduction because of a disagreement it was having with the town over a wastewater treatment services contract it was assuming as part of the deal, a purportedly surprising property tax bill, and other minor matters," the complaint reads. The suit also claims the buyer knew of these issues well before the sales agreement was finalized.

The complaint accuses the buyer of using the tragedy of Hurricane Helene as a final excuse for breaking the original agreement.

"On Sept. 29, Two Banks demanded a "substantial reduction in the purchase price" and an extension of the closing date, while also making clear that they would not 'proceed with closing under the original terms' of the agreement," the documents state.

The suit claims the buyer agreed to take the risk that the site could be destroyed or damaged in the period between signing the sales agreement and closing. Under the deal, it states, Spirtas/Two Banks would not require the seller to repair any damage to the site, but would receive any insurance payouts on the mill.

In the suit, Pactiv attorneys argue that unwinding the agreement would put the company in the impossible position of having to operate the wastewater treatment facility and other operations at the Canton Mill site indefinitely. Blue Ridge may be unable to find another buyer with matched experience and expertise, it states.

Even if Pactiv could identify an alternative buyer with similar experience and expertise, it would be required to invest more resources and time to socialize the new buyer with the town, and there is no guarantee that the alternative candidate would be satisfactory to the town, the legal document states.

Before the May decision to negotiate exclusively with Spirtas Worldwide to sell its Canton mill and associated properties, Pactiv Evergreen said the company was one of 30 competing to buy the Canton site. At the time, Pactiv Evergreen spokesperson Beth Kelly said Spirtas' wide experience working with closed paper mill sites, plus having funds in hand, gave the company an edge.