NC’s Cannon textile family, Atrium Health feud over who gets millions in inheritance

Catherine Muccigrosso
·2 min read
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Stacks from Fieldcrest Cannon mills rise above Cannon Village in Kannapolis in this 1999 file photo. The former mill site is now home to the N.C. Research Campus, a Minor League Baseball stadium and a redeveloped downtown.

One of North Carolina’s prominent families has filed a lawsuit against Charlotte’s largest hospital system over millions of dollars in inheritance.

Cannon textile mill descendants want to stop Atrium Health from receiving distributions from the family trust, according to a petition filed in N.C. business court. The trust was created in 1965 by Ruth Coltrane Cannon, wife of longtime Cannon Mills president Charles Albert Cannon, for her grandson Charles Albert Cannon III, who died Oct. 28.

Textile magnate Charles Cannon founded Cannon Mills in Kannapolis. It was the world’s largest producer of towels and sheets for decades. The mill, bought by Pillowtex 1982, abruptly closed in 2003, which wiped out 7,650 jobs. It was the largest one-day job loss in the history of North Carolina and the textile industry at that time. The mill was demolished in 2005 and is now the site of the 350-acre North Carolina Research Campus.

Following Charles Cannon III’s death, Ruth Cannon said in her will that she wanted the trust to go to Cabarrus Memorial Hospital, according to the Feb. 7 petition. If the trust could not be paid “expressly” to the Cabarrus County-owned hospital, it would be distributed to “religious, charitable, scientific, literary, or educational purposes,” the petition states.

The filing does not specify the trust’s value.

Cabarrus Memorial has not existed since the 1980s and became part of Atrium through a series of mergers in the 2000s, according to the petition. Atrium is now part of Advocate Health with revenue of more than $27 billion.

Since Cabarrus Memorial does not exist, “the trustees have preliminary concluded that Atrium Health is not the proper remainder income beneficiary,” and trustees should proceed with alternative income distribution, according to the petition.

“Atrium Health does not meet the trust’s express condition that remainder income be paid out for ‘charitable purposes,’” the petition states.

On Jan. 24, Atrium objected to the trust’s interpretation of the will and laid claim to it, threatening legal action if income distributions did not begin on Feb. 15.

“We believe the law is clear on this matter,” Atrium said in a statement to The Charlotte Observer late Friday. “The Charlotte-Mecklenburg Hospital Authority (d/b/a Atrium Health) is the successor in interest to Cabarrus Memorial Hospital and is entitled to the distributions from the trust.”

In 2022, Atrium provided $2.8 billion in free and uncompensated care and other community benefits across its service territory, according to the hospital. “Atrium Health continues to operate the hospital for the benefit of the residents of Cabarrus County,” the hospital said.

The trust is represented by Kearns Davis, James C. Adams II and Agustin M. Martinez of Brooks Pierce McLendon Humphrey & Leonard LLP.

The petition requests a jury trial.

Attorneys representing the trust did not respond by Friday afternoon for requests for comment.

The Law360 trade publication first reported the case.