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Pactiv Evergreen has agreed to shell out $6.25 million to settle a lawsuit brought by North Carolina, which sought to recover $12 million in financial incentives tied to the continued operation of the company’s paper mill in Canton. The move comes after the abrupt closure of the facility in 2023, leaving hundreds of workers jobless and a town in turmoil.

Millions Flow Back to Canton and Haywood County

North Carolina Attorney General Jeff Jackson announced the settlement Thursday, confirming that Haywood County and Canton will receive $5.75 million, while the state pockets $500,000.

Beyond the cash payout, Pactiv also abandoned its legal efforts to reclaim its 2023 and 2024 property tax payments, a decision that spares the county and town an additional $4.5 million. The company further agreed not to bill Canton for the decades-old wastewater treatment services it once provided, a move that adds substantial value to the settlement.

“This agreement ensures millions go back into Canton’s recovery instead of endless litigation,” Jackson said. “Pactiv broke its promise, and today’s settlement holds them accountable.”

The Legal Web Unraveled

While the settlement brings closure to the state’s lawsuit, Pactiv maintains it is not an admission of wrongdoing. The legal saga dates back to 2014 when Pactiv agreed to keep at least 800 jobs in Canton through the end of 2024 in exchange for $12 million in taxpayer-funded economic incentives. But in March 2023, Pactiv abruptly announced the mill’s closure, halting production just two months later and setting the stage for the state’s lawsuit.

Pactiv initially fought back, arguing that the agreement contained contradictory terms about repayment obligations. The company contended that some clauses suggested full reimbursement, while others implied a partial repayment based on the time remaining in the agreement. Despite these arguments, the court rejected Pactiv’s motion to dismiss last October, setting the stage for the settlement.

A Corporate Giant’s Next Move

The timing of Pactiv’s legal retreat coincides with its impending $6.7 billion merger with packaging manufacturer Novolex, expected to close in the coming months. Novolex first announced plans to acquire Pactiv Evergreen in December, offering $18 per share in an all-cash deal.

“We are pleased to have resolved all outstanding matters related to the closure and sale of our former Canton mill site,” Pactiv said in a statement, thanking employees for their contributions and expressing hope for the town’s future.

What’s Next for Canton?

For Canton and Haywood County, the settlement injects millions back into the community at a crucial time. The town, once reliant on the mill’s economic footprint, now faces the challenge of rebuilding its local economy. The agreement also shields the region from future legal battles with Pactiv, allowing leaders to focus on recovery rather than drawn-out court fights.

“The people of Canton deserve this,” Jackson said. “After years of uncertainty, this deal puts real money back into their hands—money they need now.”