Rep. Chuck Edwards calls for SEC investigation of Canton mill corporate stock sell-off

Joel Burgess, Asheville Citizen Times
·2 min read
In this 2009 file photo, an Evergreen Packaging supervisor works in the roll wrap area at Evergreen Packaging in Canton. The mill produces paper for liquid packages and cups, as well as commercial paper.
In this 2009 file photo, an Evergreen Packaging supervisor works in the roll wrap area at Evergreen Packaging in Canton. The mill produces paper for liquid packages and cups, as well as commercial paper.
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Congressman Chuck Edwards has called 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 closure of its Canton plant, which will result in the projected loss of 1,200 jobs and "be a devastating blow to the town and Haywood County," a release from his office said.Stocks were sold at $11.30 per share. The profits made by the executives are as follows:

  • President and CEO Michael King: $509,776

  • Chief Legal Officer and Secretary Chandra Mitchell: $63,426

  • President of Beverage Merchandising Byron Racki: $46,250

  • Chief Operations Officer Douglas Owensby: $44,849

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Town and union officials protested the sale, Mayor Zeb Smathers calling the sell-off and dividend payoffs also made by the corporation "sickening and cowardly."

In a March 9 letter to the chair of the SEC, Edwards, a Republican representing Western North Carolina's 11th District, called the sale "troubling" and potentially illegal.

Chuck Edwards Letter to SEC Chairman Gensler by USA TODAY Network on Scribd

"Only days before announcing the closure of the plant, several executives at Pactiv Evergreen reportedly sold thousands of shares of the company’s stock at $11.30 per share. After the closure of the plant was formally announced, the price of Pactiv Evergreen’s stocks plunged to $9.73 per share, which allowed these executives to profit by thousands of dollars," he wrote to Chair Gary Gensler.

"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. I urge you to investigate these actions as insider trading."

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The Citizen Times reached out to Edwards' office the morning of March 10 to ask if Gensler had responded.

Pactiv Evergreen officials defended the sell-off, saying it was needed in order to cover taxes.

"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," spokesperson Beth Kelly said.

Kelly did not immediately respond to follow-up questions asking if the sale was the only way possible to cover taxes. Even if legal, the Citizen Times asked if officials now regretted the timing of the sales, done shortly before workers were told they would lose their jobs.

 Joel Burgess has lived in WNC for more than 20 years, covering politics, government and other news. He's written award-winning stories on topics ranging from gerrymandering to police use of force. Please help support this type of journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: Chuck Edwards to SEC: Investigate Canton Mill corporate stock sell-off