Protopapas
COLUMBIA, S.C. - The purported receiver for a foreign company has asked the South Carolina Supreme Court to sanction the firm for obtaining a global injunction against him from a U.K. court, calling the move an “unprecedented violation of South Carolina and U.S. jurisprudence.”
South Carolina’s asbestos docket judge Jean H. Toal appointed local personal-injury attorney Peter Protopapas as receiver over a unit of Altrad Group, a U.K. company, after Altrad refused to respond to asbestos lawsuits in South Carolina.
Altrad then won $1.4 million in sanctions against Protopapas from the U.K. High Court of Justice, which ruled the South Carolina attorney was improperly meddling in the business of a company under its jurisdiction. Protopapas is personally liable for the U.K. sanctions and faces possible criminal liability if he violates the global injunction.
Now Protopapas is seeking sanctions against Altrad for fighting him in the U.K., telling the South Carolina Supreme Court that Altrad has “stonewalled South Carolina litigation while contemporaneously seeking unlawful relief against the receiver from courts on foreign soils.”
The sanctions request escalates an already heated and complex international battle over whether Altrad, which has never done business in South Carolina, can be put under the control of a receiver by a court in that state. The U.K. court clearly disagreed, and Altrad has noted in court filings that Protopapas, while claiming to act in the interests of Altrad, is ignoring a U.K. decision that rejected the legal arguments behind U.S. asbestos suits against the firm.
In his sanctions motion, Protopapas accuses Altrad of misleading U.K. and French courts by not citing the so-called Barton doctrine, named after an 1881 U.S. Supreme Court decision prohibiting federal courts from exercising jurisdiction over state court-appointed receivers.
Both Protopapas and Judge Toal interpret Barton to mean his receivership cannot be challenged by any court, anywhere, without Judge Toal’s permission. Toal has appointed Protopapas to take control of defunct companies targeted in asbestos suits to obtain money from their previous insurers.
“Their contemptuous behavior cast a dark shadow on the integrity of our legal system, encourages others to defy orders, impairs the receiver’s ability to fulfill his court-appointed duties, and has exposed the receiver, an arm of the South Carolina courts, to personal monetary liabilities and potential criminal prosecution for following the orders of the South Carolina courts,” Protopapas said in his motion.
He's likely to receive a friendly reception at the South Carolina Supreme Court, which recently addressed the Altrad situation in another case, saying the U.K. injunction is “shocking to American eyes,” and “indefensible.”
The Supreme Court upheld Protopapas’ receivership of a Canadian company in the other case, ruling Judge Toal could exercise jurisdiction over it to seek money from insurance policies it had in effect at the times asbestos plaintiffs claim they were exposed to its products.
The U.K. court has the same opinion of Protopapas, however, saying in its November 2024 order he is “positively damaging the interests of the company over whose assets he has been appointed, despite the fact that one of his obligations is to act in its proper interests.”
Protopapas also accuses of Altrad’s U.K. lawyers of threatening Morgan, Lewis & Bockius, the New York firm which also represents his receiverships in exchange for a percentage of any money they recover for asbestos plaintiffs. Signature Litigation, the U.K. firm representing Altrad, has reminded Morgan Lewis’ London office of the risk of civil and criminal liability for interfering with Altrad.
Signature sought to coerce Morgan Lewis “to abandon its legal and ethical obligations to the South Carolina court appointed receiver, or face future litigation in London.”
Altrad made an identical complaint against Protopapas last year, however, accusing him of suing Winston & Strawn in a successful bid to get the firm to drop its representation of Altrad. Protopapas previously sued a South Carolina law firm for malpractice after it fought his receivership actions, winning a $5 million settlement in that case.
Protopapas refused to appear in the U.K. hearings leading up to the global injunction against him and allegedly slammed the door in the face of a process server in the U.S. Yet he complains that “as soon as the time for the appeal of the U.K. order had lapsed and it was therefore deemed enforceable,” the company went to France and obtained a second judgment against him.
In both cases, Protopapas accuses Altrad’s lawyers by name of the same offense he based his malpractice claim against the South Carolina law firm on – too zealously defending the interests of a company he considered himself receiver over, and failing to cite what he considers court decisions in his favor.
Altrad is the corporate parent of Cape Plc, which is the successor company to a South African asbestos mining concern. Altrad bought Cape in 2017, when the company still was administering a $100 million trust to pay asbestos claims in the U.K. Cape closed a U.S. subsidiary in 1978.
Altrad is a multibillion-dollar industrial services firm with other U.S. subsidiaries, including one that does business in South Carolina. But it requires extensive litigation to impose liability from one corporate unit onto another in what is known as piercing the corporate veil.
