CANTON, N.C. (From news reports) -- Attorney General Josh Stein's lawsuit against Pactiv Evergreen demanding repayment of $12 million in state incentives after the company shuttered Canton's paper mill can proceed, a Wake County Superior Court judge ruled Oct. 10.

In May, Stein filed the lawsuit against the mill's Illinois-based corporate owner, arguing Pactiv Evergreen violated the terms of the incentives grant and calling for the $12 million in state funds to be returned. The company shuttered the mill in May 2023 resulting in hundreds of layoffs.

On July 29, defendants Blue Ridge Paper Products LLC and Evergreen Packaging LLC -- two previous owners that were part of deals that led to the 2020 merger with Pactiv -- moved to dismiss part of Stein's complaint. In court filings, attorneys for the company argued that Stein's demand was inconsistent with contract law and North Carolina precedent, calling the move an "unenforceable penalty,"

In his Oct. 8 response, Stein wrote the defendants' belief that state law excuses them from having to repay those funds is "wrong on the law, not to mention the equities, especially in light of the hardships that the mill's closure have caused for its more than 800 former employees and for the people of Canton and Haywood County."

In an Oct. 10 statement following the court's ruling in his favor, Stein said he was "pleased that the court saw through Pactiv's baseless attempts to avoid paying back the state's money." The ruling came less than two weeks after Tropical Storm Helene ripped through Western North Carolina, including Canton and Haywood County, an area crushed by deadly floods just two years ago.

"The people of Canton have kept their heads up through the mill closing that devastated their economy last year and the hurricane that devastated their homes a few days ago," he added. "Pactiv owes the state this money so we can put it towards rebuilding and growing economic opportunities in Canton and Western North Carolina."