A Charlotte-based bubble wrap company is being sued by an Israeli bottle technology business claiming that a contract was terminated to avoid payments of more than $25 million, according to North Carolina Business Court records.
Water.io spent about two years designing and making products for Sealed Air Corporation, Water.io said. And ending the contract in 2021 was economically devastating for Water.io, a business with less than 20 employees, the suit said.
Water.io was established in 2015 and makes app-connected smart caps that transport data from water bottles to encourage customers to drink more water. It’s now known as ImpacX after a name change in 2021. The company also offers apps and technology for vitamin usage and smart bottles to measure content inside a container.
The company signed a purchase agreement with Sealed Air in 2018 to produce 15,000 sensors for vacuum insulated panels to use in a customer pilot trial to detect, measure and transmit data, according to the lawsuit.
Water.io claims thousands of hours were spent developing, testing and improving the technology, and Sealed Air had purchased equipment to build a laboratory in Charlotte to test the sensors.
Sealed Air and Water.io were on good terms for awhile with plans for expansion and exclusive business deals, the suit claims. But a conflict arose in May 2021 when Water.io received a letter saying that the delivered sensors were not in conformance with specifications and warranties during a production phase.
Water.io claimed it was in the next phase of the production and was asked to provide an invoice for its services. But Sealed Air decided not to continue with the partnership, according to court records.
“(Sealed Air) knew it had no legitimate basis to assert ‘material breach’ by Water.io, and was attempting to concoct access to a right to terminate without cause — the first of two arms of a (Sealed Air) effort to halt its obligation to perform under the contract,” the plaintiff claimed.
Attorney Edward Hennessey IV, a representative for Water.io, said the case is in the early stages of litigation. A jury trial is being requested for the case filed in August in Mecklenburg County.
Mark Wilson, attorney for Sealed Air, denied the allegations in court documents. Sealed Air claimed that Water.io failed to make the products and couldn’t manufacture the promised sensors, according to court records. Sealed Air said a delivery was required by June 30, 2020, but it was not received until Dec. 31 of that year.
Both companies declined to provide comments to The Charlotte Observer about the case.
About Sealed Air
Sealed Air was founded in 1960. It makes bubble wrap and padded envelopes, among other products.
The company moved its headquarters in 2014 from New Jersey to Charlotte to a 32-acre campus off West Tyvola Road.
Last year, Sealed Air employed more than 7,000 people in the U.S. and 9,800 in other countries. Sealed Air reported sales of $5.5 billion, last year, according to court documents.
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