COLUMBIA, S.C. (Legal Newsline) - A U.K. court has threatened South Carolina attorney Peter Protopapas with prison if he continues to claim he is the legal representative of Cape Plc, a U.K. company whose corporate predecessor once mined asbestos in South Africa.
The High Court of Justice added a “penal notice” to a worldwide injunction it issued Nov. 22, threatening fines or even prison for Protopapas or anyone else who purports to represent Cape, even if they believe they are acting under the authority of another court.
Cape’s lawyers sent a letter to Morgan Lewis, a corporate law firm that works with Protopapas tracking down decades-old insurance policies for defunct companies in order to pay asbestos claimants, informing them they could also be sanctioned for claiming to represent Cape.
“ANY PERSON WHO KNOWS OF THIS ORDER AND DISOBEYS THIS ORDER OR DOES ANYTHING WHICH HELPS OR PERMITS ANY PERSON TO WHOM THIS ORDER APPLIES TO BREACH THE TERMS OF THIS ORDER MAY ALSO BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE THEIR ASSETS SEIZED,” the notice says, in bold capital letters.
Protopapas didn’t immediately respond to a request for comment. He has declined past requests from Legal Newsline, which has likened his power in the South Carolina asbestos court to raising the dead. Protopapas, appointed as receiver by Judge Jean Toal, drums up old insurance policies, then sues the insurer for funds that will be used to pay plaintiffs who can now sue these dead companies.
Protopapas keeps one-third of whatever he recovers, with the money going into secret entities in Delaware called Qualified Settlement Funds. There is no public disclosure of the financial records of the QSFs.
Most insurers are glad the records are kept private, as they don't want their settlement terms used against them in future cases. One company, though, is making a push for transparency. All this and more has landed South Carolina the No. 3 spot on the annual list of "Judicial Hellholes" by the American Tort Reform Association.
The court action in London escalates an international battle for control of Cape, a unit of Altrad Group owned by French billionaire Mohad Altrad. Judge Toal, a former Chief Justice of the South Carolina Supreme Court who in retirement overseas the state’s asbestos docket, assigned Protopapas receiver over Cape so he could try to recover money for asbestos plaintiffs from third parties including Cape’s corporate parent.
Protopapas is also suing international mining giant Anglo American and diamond miners De Beers in Cape’s name, claiming they were part of a cartel that tried to hid assets from U.S. asbestos plaintiffs.
The U.K. court rejects Judge Toal’s claim of jurisdiction over Cape, however, since it never did business in South Carolina. Altrad bought the company long after it exited the asbestos business, although it still manages a fund to pay U.K. asbestos claimants.
A U.K. court rejected the conspiracy theory Protopapas is advancing in Cape’s name in a landmark 1990 decision, meaning Protopapas is actually making legal arguments the company he purports to represent already defeated in court.
Protopapas “is a receiver, one of whose functions is apparently to protect the interests of” Cape, Justice Anthony Mann wrote in his injunction order. “Yet he has demonstrated that he is not fulfilling that obligation, and is indeed apparently doing the opposite.”
Cape’s lawyers, Signature Litigation, warned Protopapas and lawyers he hired against taking any further actions in South Carolina in the name of Cape Intermediate Holdings Ltd, the legal name of the entity.
“It is clear that you are deliberately violating and disregarding the Order of the High Court and continuing to purport to act for and on behalf of CIHL in breach of that Order. We have already drawn your attention to the Penal Notice at the front of the Order which makes it clear that if you disobey the Order you may be held in contempt of court and may be imprisoned, fined or have your assets seized,” Signature Group said.
The U.K. court has no legal authority over Judge Toal, but Protopapas presumably would face legal consequences if he traveled to England. Cape’s lawyers set a Dec. 12 deadline for Protopapas to respond, which apparently he didn’t meet. He filed the letter and penal notice in Judge Toal’s court on Dec. 16.