Twist ending in battle for $17 million NC textile fortune. There’s a new beneficiary
The contentious court battle over a North Carolina textile fortune between descendants of a storied N.C. textile family and Charlotte’s largest hospital system is over. And it ended with a new beneficiary being named.
Atrium Health and the family of one-time owners of Kannapolis-based Cannon Mills Co. settled their dispute Friday over the $17 million family trust, according to a final judgment entered in N.C. Business Court.
It’s also the first time the trust’s value has been publicly revealed since descendants of Cannon Mills owners filed a lawsuit in February to stop Atrium from receiving distributions from the family trust.
The will has been modified, deleting one section and rewriting another to specify new beneficiaries.
The deleted section had named county-owned Cabarrus Memorial Hospital as the recipient of distributions, which, through a series of mergers over the years, became Atrium.
The revised section named the new beneficiary of trust money. At the discretion of the trustees, 50% of annual net income distributions from the trust will go to Wake Forest University Baptist Medical Center or Wake Forest University Health Sciences, so long as the organizations remain tax-exempt nonprofits, according to court documents.
Atrium Health acquired Wake Forest Baptist in October 2020. The partnership is building Charlotte’s first four-year medical school in uptown. The project at McDowell and Baxter streets broke ground last year and is expected to open next year.
Despite the end of the legal fight, it remains unclear who gets the other half of the income distributions.
Atrium Health and Kearns Davis, an attorney representing the trust, did not respond to multiple requests for comment since Friday.
Atrium Health’s Wake Forest Baptist Health and Wake Forest University Atrium Health are named as beneficiaries in the settlement dispute over the $17 million Cannon Mill Co. family trust, according to filings in N.C. Business Court.
About Cannon Mills
The defunct Cannon Mills company was once the world’s largest producer of towels and sheets, and was founded in 1887 by James Cannon in Concord.
He died in 1921 and his son Charles Albert Cannon took over the business, which by then had relocated to neighboring Kannapolis.
The Cabarrus County company went through ownership and name changes over the years, including Fieldcrest Cannon and Pillowtex. In 2003, Pillowtex folded and went bankrupt. Its 7,650 layoffs, predominantly in Cabarrus and Rowan counties, was the largest single-day job loss in North Carolina’s history at the time.
Details about the textile money fight
The legal dispute stemmed from Ruth Coltrane Cannon’s will, which was created in 1965. The wife of Charles Albert Cannon, she created the trust for her grandson Charles Albert Cannon III, who died Oct. 28.
Story continues
According to Ruth Cannon’s will, after her son’s death, the trust would go to Cabarrus Memorial Hospital. 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.”
Cabarrus Memorial has not existed since the 1980s; through a series of mergers it became part of Atrium in the 2000s. Atrium is now part of Advocate Health, with revenue of more than $27 billion.
Since Cabarrus Memorial does not exist, the trustees claimed Atrium Health was not the proper beneficiary. In February, Cannon textile mill descendants filed a lawsuit to stop Atrium from receiving trust distributions.
However, Atrium objected and threatened legal action if income distributions did not begin on Feb. 15.
In April, Atrium filed a counterclaim to remove the trustees. But by June, a settlement was reached dismissing all claims and counterclaims.
The trust administration became impractical because of differing interpretations of the will’s original terms, Michael Robinson, special superior court judge for complex business cases said in Friday’s finalized order.
To resolve this and avoid further litigation expenses, both parties agreed to modify the trust to align it with its charitable intent.
The Wake Forest groups are named as beneficiaries after the death of Ruth Cannon’s three children, which has occurred. No other beneficiaries are specified in the court document.
#Twist #battle #million #textile #fortune #beneficiary