Atrium Health and Cannon Mills heirs reach settlement in big-money inheritance dispute

The clash over millions of dollars in inheritance between the heirs of a North Carolina textile fortune and a major hospital system has neared an end and awaits court approval of a settlement.

Cannon Mills Co. descendants and Atrium Health signed a settlement agreement resolving all claims and counterclaims in the battle over the family trust, an N.C. Business Court joint motion filed Friday shows.

The dispute is over who is the rightful heir to the Cannon trust that was left to a county-owned hospital, which through mergers is now Atrium Health.

The agreement is subject to Attorney General Josh Stein ’s review and court approval. If Stein has not advised the parties of a position on or before July 8, the parties will file a motion for approval of the settlement, the court filing states.

Terms and conditions of the settlement agreement, and the value of the trust, are not specified in court documents. The Observer previously reported about the case that the trust is worth millions of dollars.

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

Atrium Health officials and trustee attorneys did not immediately respond to a request for comment Friday afternoon.

The prominent Cannon family filed the lawsuit in February, claiming Atrium is not the intended recipient of the trust and does not meet its charitable purposes.

Atrium — overseen by the Charlotte-Mecklenburg Hospital Authority — argues it’s entitled to trust distributions.

In April, retired N.C. Business Court Chief Judge Jim Gale was assigned to oversee mediation in the case .

The Cannon Trust background and fight

The defunct Cannon Mills company, based in Kannapolis, was once the world’s largest producer of towels and sheets.

The yarn-spinning company was started in 1887 by James Cannon in Concord. When he died in 1921, his son Charles Albert Cannon took over. By then, the company had relocated to what would become Kannapolis and in a few years, was known as Cannon Mills.

After several owners and name changes, the company went bankrupt as Pillowtex in 2003 with 7,650 layoffs. That was the largest one-day job loss in the history of North Carolina at the time.

In 1965, Charles Cannon’s wife, Ruth Coltrane Cannon, created a trust for grandson, Charles Albert Cannon III. After his death, she said in her will, the trust would go to county-owned Cabarrus Memorial Hospital. He died in October.

Cabarrus Memorial, through a series of mergers over the past decades, became part of Atrium. The hospital is now part of Advocate Health with revenue of more than $27 billion.

In February, Cannon textile mill descendants filed a lawsuit to stop Atrium from receiving trust distributions.

Trustees claimed because Cabarrus Memorial doesn’t exist, Atrium is not the beneficiary. If the trust could not be paid “expressly” to the county-owned Cabarrus Memorial Hospital, it was to be distributed to “religious, charitable, scientific, literary, or educational purposes,” the trustees argued in court documents.

Atrium, however, objected to the trust’s interpretation of the will and threatened legal action if distributions did not begin Feb. 15. In April, Atrium filed a counterclaim to remove the trustees.