North Carolina Attorney General Josh Stein has filed a lawsuit against Pactiv Evergreen, the owners of the now-shuttered paper mill in Canton, Haywood County. 

The paper mill, which had been in operation for over 100 years, closed in May 2023, leaving about 1,300 workers seeking new jobs.

The lawsuit, filed on behalf of the North Carolina Department of Commerce, states that the Lake Forest, IL-based company breached a 2014 grant agreement with the department and demands that Pactiv Evergreen repay $12 million to the state.

In 2015, a subsidiary of Pactiv Evergreen was awarded a Job Maintenance and Capital Development Fund (JMAC) Grant, which was used to convert two of its coal-fired boilers to natural gas at the Haywood County plant. The grant was formulated and awarded after the NC House failed to pass a bill that would have awarded $12 million in grant funding for the paper mill.

The agreement included that 939 jobs would be retained through Dec. 31, 2024.

 “Taxpayers in North Carolina invested in Pactiv Evergreen to bolster our state’s economy,” said Stein in a press release. “We held up our end of the bargain, and we cannot let Pactiv cut and run away with our state’s money. My office has been working with Pactiv over the last year to address the company’s obligations under the JMAC agreement, but it has become clear that legal action was necessary to hold Pactiv accountable.”

The company said the closure was part of its restructuring and reorganization plan for management structure and its beverage merchandising segment.

Zeb Smathers, mayor of Canton, spoke with Carolina Journal before the closure last year.

“Back in 2014, there was a JMAC to switch a boiler over to natural gas,” said Smathers. “There have been other grants locally. If they [Pactiv Evergreen] complied, great. If they didn’t, I want that money brought back. I want our taxpayer money back, especially in Haywood County. You broke your word in more ways than one, and there are repercussions for that. One of the things I’ve talked a lot about is respect. Yes, we’re dealing with mourning and finding ways forward with these people’s jobs but in some regards, this is very sickening to me given how it all went down.”

Smathers said in Stein’s press release that he appreciated Stein’s efforts to get the money back. 

“We teach our children that when you make promises, you keep those promises, he said. “Pactiv Evergreen took $12 million from the state in exchange for a promise to keep the mill open; a promise they did not keep. We fully support the DOJ’s efforts to recover this money and hold Pactiv accountable to the taxpayers of North Carolina.”

There was some good news last week regarding the site of the former business. Smathers told Smoky Mountain News that Spiritas Worldwide, a management consulting firm from St. Louis, MO, is said to have submitted a letter of intent to purchase the property.

Zach Rounceville contributed to this story.