A Charlotte-based bubble wrap company is being sued by an Israeli bottle technology company that claims a contract was terminated to avoid payments of more than $25 million, North Carolina Business Court records show.
Water.io spent about two years designing and creating products for Sealed Air Corporation, Water.io said. And terminating the contract in 2021 was economically devastating for Water.io company with fewer than 20 employees, the suit said.
Founded in 2015, Water.io makes app-linked smart caps that transport data from water bottles to encourage customers to drink more water. After a name change in 2021, it is now called ImpacX. The company also offers apps and technology for vitamin use and smart bottles to measure the contents in a container.
The company signed a purchase agreement with Sealed Air in 2018 to produce 15,000 vacuum-insulated panel sensors for use in a customer pilot trial to sense, measure and transmit data, the lawsuit said.
Water.io claims thousands of hours have been spent developing, testing and improving the technology, and Sealed Air has purchased equipment to build a lab in Charlotte to test the sensors.
Sealed Air and Water.io were on good terms for a while with plans for expansion and exclusive business deals, the lawsuit alleges. But in May 2021, a conflict arose when Water.io received a letter stating that the sensors supplied during a production phase did not meet specifications and warranties.
Water.io claimed it was in the next phase of production and was asked to provide an invoice for its services. But according to the court, Sealed Air has decided not to continue the collaboration.
“(Sealed Air) knew it had no legitimate basis to claim a ‘material breach’ by Water.io, and sought to access a right to terminate without cause – the first of two arms of a (Sealed Air) attempt to halt its obligation to perform under the contract,” the plaintiff alleged.
Attorney Edward Hennessey IV, A representative of Water.io, said the case is in the early stages of litigation. A jury trial is being requested for the case filed in Mecklenburg County in August.
Mark Wilson, attorney for Sealed Air, denied the allegations in court documents. Sealed Air alleged that Water.io failed to produce the products and failed to manufacture the promised sensors, according to court documents. Sealed Air said delivery was required by June 30, 2020, but was not received until December 31 of that year.
Both companies declined to comment to The Charlotte Observer on the matter.
About sealed air
Sealed Air was founded in 1960. It produces, among other things, bubble wrap and padded envelopes.
The company moved its headquarters from New Jersey to Charlotte in 2014 to a 32-acre campus on 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 revenues of $5.5 billion, last year, according to court documents.
