CANTON, N.C. (From news reports) -- The state of North Carolina has settled its lawsuit against Pactiv Evergreen, with the company agreeing to repay about half of the $12 million it received for creating jobs at the now-shuttered Canton paper mill.
The settlement, announced Thursday by Attorney General Jeff Jackson (D) and Gov. Josh Stein (D), brings to a close one of the most difficult periods in Canton's recent history, marked by Pactiv Evergreen's abrupt closure of the mill in May 2023. Since then, there have been ongoing battles with the town and Haywood County over matters ranging from Pactiv's property tax bill to its operation of Canton's wastewater treatment plant.
"Pactiv broke its promise to the state and the people of Canton, and today's settlement holds it accountable for violating its agreement," Jackson said in a statement. "This settlement will allow the people of Canton and Haywood County to immediately put millions back into rebuilding their economy after the mill's closure, and it will shield them from future litigation from Pactiv."
Canton Mayor Zeb Smathers said the agreement "marks the beginning of a new chapter for Canton."
"I am grateful to the state for their hard work in securing these resources, which will allow us to create new opportunities, jobs, and lasting stability without Pactiv," he said in a statement.
As attorney general, Stein sued Pactiv Evergreen last May, arguing that the company violated its obligations under the state's Job Maintenance and Capital Development (JMAC) program, which required it to employ a minimum of 800 people until the end of December 2024. In exchange, the state agreed to provide economic development incentives to the company, paid for by taxpayers.
Under this week's settlement, Pactiv Evergreen will pay about $3 million to Haywood County, about $2.7 million to Canton and $500,000 to the state. The total amount, $6.25 million, falls short of the full $12 million the company received under the JMAC program.
But Jackson and Stein said the actual value of the settlement is greater given that the state won an agreement from Pactiv Evergreen to withdraw its legal challenges over the property tax payments and waive its right to bill Canton for the costs of operating the wastewater treatment plant through early March.
"The people of Canton are so resilient; they lost the paper mill and have overcome two major floods in the past three years," Stein said. "They will build a brighter future, and the state is committed to working right alongside them to help."
Pactiv Evergreen said it welcomed the settlement.
"We are pleased to have resolved with the State of North Carolina all outstanding matters relating to the closure and sale of our former Canton mill site," spokesperson Beth Kelly said in a statement. "We thank our employees for their contributions to our company and wish the Canton community well in this next chapter for the Town."
The company had argued in court that it should not be required to repay the full $12 million and that it should instead only have to pay a proportionate amount since it upheld its end of the bargain for more than eight years.
The settlement states that it represents a "compromise" and a "release of disputed claims," and that it should not be "deemed or construed to be an admission by any Party of any kind."
Last month, Pactiv Evergreen completed the sale of the former mill site to St. Louis-based Spirtas Worldwide. Canton will likely have to bear at least some of the cost for its wastewater treatment going forward; the exact details remain uncertain.
