Jackson, Stein announce settlement in Pactiv grant lawsuit
Pactiv Evergreen will repay a portion of a state grant after a settlement related to a paper mill it formerly operated in Canton.
Cory Vaillancourt photo
Nearly $6 million in taxpayer money will be coming back to Haywood County after Attorney General Jeff Jackson and Gov. Josh Stein announced that a settlement has been reached in a lawsuit alleging that Pactiv Evergreen had violated the terms of a decade-old economic development grant agreement when it closed its Canton paper mill in 2023.
“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 press release issued this morning. “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. After a devastating few years, this deal gives the people of Canton funds they desperately need right now.”
The underpinnings of the lawsuit began in 2023, after The Smoky Mountain News was first to report that a 2014 economic development grant between the state and Pactiv was still active and that Pactiv would appear to be in violation of the grant’s terms if it followed through with plans to shutter its Canton mill.
The grant agreement stipulated, among other things, that in exchange for $12 million over 10 years to convert its coal-fired boilers to natural gas, Pactiv had to spend at least $51 million on improvements. The company actually spent $56 million. However, another condition of the agreement bound Pactiv to maintain at least 800 jobs at the site through Dec. 31, 2024.
Gov. Roy Cooper warned Pactiv about the grant conditions in a letter written less than two weeks after Pactiv announced its plans to close but Pactiv closed the mill anyway, in June 2023, throwing roughly 1,000 people out of work.
Attorney General Josh Stein, now governor, filed suit on May 23, 2024, telling SMN at the time that he’d hold Pactiv accountable for its obligations, which became something of a mantra during Stein’s campaign swings in the mountain west.
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In a subsequent filing, Pactiv admitted that it had fulfilled “nearly all of its obligations under the JMAC agreement” but went on to assert that “there is no legal or factual basis to sustain the relief” sought by the state.
Stein said he was pleased with the settlement and that it represents a “new chapter” for the town.
“The people of Canton are so resilient; they lost the paper mill and have overcome two major floods in the past three years,” he said. “They will build a brighter future, and the state is committed to working right alongside them to help.”
During the runup to the 2024 election, both candidates vying to replace Stein as attorney general vowed to carry on his work with regard to Pactiv.
The winner of that race, former Congressman Jeff Jackson, said in Canton on Jan. 16 that “… there may be some attorneys in this litigation on the other side who were hoping that a new attorney general would dismiss this case,” but he wanted to “send a message that that's not going to happen, that I am the new attorney general and we're going to continue with this case, because it's a very straightforward matter of an agreement being broken.”
Jackson added that if the suit was successful in recovering some or all of the grant proceeds, “our intention is to get as much of that money here to Canton as possible.”
Trial in the matter had been set for May; however settlement conferences had taken place without any resolution until today’s announcement.
According to details of the settlement, within 10 business days Pactiv will pay $6.25 million.
Haywood County will receive $2,732,611 and the Town of Canton will receive $2,732,611. Per Haywood Chamber President and CEO David Francis, Haywood County will also recieve repayment of incentives it offered in conjunction with the JMAC agreement in the amount of $286,778. The Department of Commerce will receive $500,000.
The relatively quick payment schedule means the county and Canton can begin using the money almost immediately, instead of waiting on costly, drawn-out litigation that could have lingered for years and produced a less lucrative result.
North Carolina Department of Commerce Secretary Lee Lilley noted that the access to capital would “not only drive future economic development but also help the community recover from the impacts of job loss, Tropical Storm Fred and Hurricane Helene.”
The settlement also releases the Town of Canton from any threat of future litigation over the nearly no-cost wastewater treatment Pactiv and its predecessors had provided to the town since 1964, and requires Pactiv to withdraw all legal challenges to its 2023 and 2024 property tax payments, which could have cost the town and county upwards of $4 million.
Kevin Ensley, chair of the Haywood County Board of Commissioners, called the settlement “a unique opportunity” to honor the mill’s proud past by envisioning a brighter future.
“As a community built on strong mountain values — hard work and unity — we will face the challenges ahead together,” Ensley said. “I believe we are laying the foundation for new industries that will once again transform Haywood County. My greatest hope is that we will stand proud of what we accomplish, setting the stage for growth and opportunity.”
Given the original purpose of the funds, it’s likely both Haywood County and Canton strongly consider using the settlement proceeds in the same way — for economic development.
“This settlement marks the beginning of a new chapter for Canton — a chapter that will build the hometown of tomorrow that reflects our grit, resilience and commitment to our community,” said Canton Mayor Zeb Smathers. “I am grateful to the state for their hard work and securing these resources which will allow us to create new opportunities, jobs and lasting stability without Pactiv.”
This is a developing story. Check back for updates in the next issue of The Smoky Mountain News, online and on newsstands on Wednesday, Feb. 19.
