Protopapas
COLUMBIA, S.C. - A prominent South Carolina lawyer is facing a potential $34 million in sanctions by a French court for interfering in the operations of a U.K. company he claims he has authority over, adding to the international pressure on him as well as the judge who has repeatedly appointed him to a role that has rewarded him with millions of dollars in fees.
Lawyers for Peter Protopapas complained in a recent filing in state court in South Carolina that Altrad Group has asked a judge in Montpelier, France, to award more than 28 million Euros in damages and legal costs. A U.K. court last year issued a global injunction against Protopapas and fined him more than $1 million over similar claims he has illegally attempted to interfere in Altrad’s legal affairs and operations as he pursues payments for asbestos plaintiffs in South Carolina.
Protopapas, who is on a committee that helps select judges in the state, acts as a court-appointed receiver over more than 20 firms - mostly defunct companies that are named in asbestos lawsuits. He goes after the companies’ former insurers to collect millions from decades-old policies while keeping one-third for himself.
Protopapas was appointed receiver over a unit of Altrad, which is an international industrial-services company with tens of thousands of employees, by Judge Jean H. Toal, a retired chief justice of the South Carolina Supreme Court who is in charge of the state’s asbestos docket.
Judge Toal kicked up an international legal battle when she appointed Protopapas receiver over Altrad’s Cape Plc, however, since the company is solvent and its owner, billionaire Mohad Altrad, is fighting back.
“These damages are being pursued against Mr. Protopapas for acting as an arm of the court in accordance with the South Carolina circuit court’s order of appointment and despite the circuit court’s order confirming his actions have been within the scope of the appointment order,” lawyers for Protopapas wrote Sept. 18.
Altrad argues Judge Toal has no jurisdiction over Cape since it has never done business in South Carolina. Cape is the successor to a South African asbestos mining company that ceased selling asbestos in the early 1980s.
Protopapas claims Cape is liable for asbestos other companies imported into the U.S. and distributed in South Carolina. He claims South African mining giants DeBeers and Anglo American are part of a conspiracy with Cape to evade U.S. liability.
Judge Toal and Protopapas were largely successful with the receivership strategy when their targets were defunct companies with no owners. Protopapas has collected millions of dollars in fees as his share of settlements with insurance companies.
The judge has encountered resistance as she has attempted to widen her reach to out-of-state and even international companies with owners, however. The Third Circuit Court of Appeals earlier this month affirmed a bankruptcy court’s rejection of Judge Toal’s attempt to appoint Protopapas receiver over Whittaker, Clark & Daniels after it was hit with a $29 million talc verdict in South Carolina.
Judge Toal purportedly gave Protopapas the power to reverse Whittaker Clark’s decision to file for bankruptcy protection in order to preserve its assets for South Carolina asbestos plaintiffs.
The Third Circuit rejected Judge Toal’s order, saying basic principles of constitutional law prevent a judge in one state from taking control of a company subject to the laws of another. Judge Toal tried to give Protopapas the power to usurp Whittaker Clark’s board of directors, a step even the South Carolina Supreme Court rejected in a recent decision.
Were the judge’s understanding of the law correct, the Third Circuit said, “it would be an unprecedented exertion of power over a foreign corporation whose internal affairs are governed by the laws of a sister state, and a radical intrusion into the province of a co-equal sovereign.”
The U.K. court voiced similar concerns last year, saying Protopapas had no authority to act in the name of Cape. As in New Jersey, where Protopapas failed to adhere to the state’s rules on applying for receivership powers, Protopapas has refused to participate in the U.K. proceedings against him, even as he accuses Cape and other companies of bad faith for refusing to acknowledge his jurisdiction over them.
The U.K. court heard testimony from a process server who attempted to serve him notice of the hearing at his office in South Carolina.
“Mr. Protopapas slammed the door in my face and told me not to come back, and that if I did he was going to put me on trespassing notice,” the server said in a witness statement.
