Representative Chuck Edwards questions stock sale by Canton paper mill executives
Following the announcement of the closure of the Canton papermill, Congressman Chuck Edwards joined local calls for the Securities and Exchange Commission to investigate the selling of stock by four of Pactiv Evergreen executives four days before the company announced the plans to shutter.
"It would be illegal for anyone to profit from inside information, and it would be reprehensible for them to reap a windfall while workers in my district will soon be struggling even more to provide for their families," Edwards said in a letter to SEC Chairman Gary Gensler. "I urge you to investigate these actions as insider trading."
Pactiv Evergreen officials issued a statement denying any wrongdoing in the sales.
“The sales that were reported in our SEC filings on Monday were sales automatically done by the Company to cover legally required tax withholding and were not discretionary sales made by the executives.” Pactive Evergreen Director of Communications Beth Kelly said in an email to BPR.
Citing other news sources, Edwards office issued a press release outlining money earned by company officials from the sales:
- President and CEO Michael King: 45,113 shares for $509,776
- Chief Legal Officer & Sec. Chandra Mitchell: 5,613 shares for $63,426.90
- President of Beverage Merchandising Byron Racki: 4,093 shares for $46,250.90
- Chief Operations Officer Douglas Owensby: 3,969 shares for $44,849
Canton Mayor Zeb Smathers thanked Edwards on Twitter.
Thank you @RepEdwards https://t.co/WQiKQOxUGX— Zeb L. Smathers (@ZebSmathers) March 9, 2023
On Friday afternoon, Smathers said the company's statement doesn't change anything.
"Every single worker at that mill deserves the truth and Rep. Edwards and others are interested in the SEC providing those answers," he said. "That's why we have the SEC, so I certainly hope that they followed the law, and I look forward to seeing what the SEC says."
The town is still taking stock of how this will impact workers, the county and the region, he said.
“Well, sadly, in North Carolina, this is not the first time this has happened. So we'll be looking for the playbook of other places, textile, furniture mills that have closed throughout the years,” he said.
In Canton, many parts of the town’s infrastructure are linked to the papermill which is the town’s largest employer and a key part of the community’s identity.
“Another one of our major concerns is that the mill treats our wastewater for the town. We have had conversations with DEQ and the mill. And the mill has expressed that will remain,” Smathers said, referring to a meeting with the mill on Monday.
Local businesses are stepping up to help workers affected by the closing. Champion Credit Union President Jake Robinson said the Tropical Storm Fred relief fund will expand to include members who are displaced workers from the paper mill.
"As an organization, we have worked diligently to diversify our business in order to withstand any unexpected economic circumstances – this situation is no different,” said Robinson in a statement on Facebook.
The credit union was created in 1932 by employees of the paper mill – known at that time as Champion Fiber.
North Carolina Governor Roy Cooper said his administration will begin working to stabilize the regional economy.
“This is a shocking, cruel blow to families who have depended for years on wages and business from Canton Mills. I talked with Mayor Smathers and my administration is all in to help find solutions and create new opportunities for Western NC,” Cooper said in a statement on Twitter.
This is a shocking, cruel blow to families who have depended for years on wages and business from Canton Mills. I talked with Mayor Smathers and my administration is all in to help find solutions and create new opportunities for Western NC. - RC https://t.co/XY7A03wcXZ— Governor Roy Cooper (@NC_Governor) March 7, 2023
Despite the unclear future for the town, officials offer a unifying message. The town’s Facebook page posted this message on Wednesday:
“The Town of Canton Board and staff would like to thank all of the generations of employees that have worked in this mill from day 1 until the closing day. You have made a difference in so many people's lives with the community support you have provided. The Town of Canton will always embrace the legacy of the employees with the tireless hard work, resiliency, grit, grace, and dedication that you have shown over the decades. We mourn with all the employees during these uncertain times, we most importantly stand behind you as a community because we will always be #milltownstrong because together, we stand! We will continue to pray for all those affected as you endeavor on a path forward.”