Protopapas
COLUMBIA, S.C. - A lawyer seeking control over a foreign company will face off in a South Carolina court today against attorneys who say he’s acting without authority and in direct violation of recent state Supreme Court rulings.
At a hearing scheduled for this morning, Judge Jean Toal will hear arguments for and against her practice of appointing local personal-injury lawyer Peter Protopapas as receiver with wide powers to collect money for asbestos plaintiffs, including suing insurers and third parties.
Judge Toal has run into a wall of opposition from foreign companies, including the DeBeers diamond-mining giant, after Protopapas used his purported receivership to sue them with claims they participated in a global conspiracy to hide assets from South Carolina asbestos plaintiffs.
Lawyers for DeBeers, Anglo-American and U.K. industrial-services firm Cape Plc will argue Protopapas has no authority to act as receiver for Cape since his initial appointment was improper. Protopapas has been acting in the name of a now-deceased asbestos plaintiff named Isabella Park but his appointment order came six months after Park’s lawyers told courts her estate had been closed and all legal matters settled.
Protopapas, who gets to keep a third of any money he collects, has since filed a motion to have himself appointed Cape’s receiver in another case known as Tibbs. But Cape’s parent company, Altrad, says he doesn’t have any authority to make such a request.
“The receiver cannot seek his own appointment, as he lacks standing to file anything in this matter or any other,” Altrad said in a July 18 filing.
Protopapas leveraged his appointment in the Park case to accept service on behalf of Cape, then file a lengthy complaint accusing Cape, DeBeers and Anglo-American of attempting to defraud U.S. asbestos plaintiffs. To make his case, however, he had to ignore a widely known decision by the U.K. court that has jurisdiction over Cape finding that theory to be false, effectively acting against the interests of the company he purported to represent.
“The receiver continues to push a story on this court that he knows has been repeatedly debunked,” Altrad said.
Cape never did business in the U.S., although a separately incorporated subsidiary in Chicago distributed Cape’s asbestos products in the 1950s through the 1970s.
Altrad bought Cape long after it ceased mining asbestos, although the firm still administers a trust that pays asbestos claims in the U.K. A court there last year ordered Protopapas to cease acting as receiver, under threat of civil and criminal penalties. He was also fined more than $1 million.
Protopapas has marshalled his own supporters to continue acting in Cape’s name, most prominently Motley Rice, the South Carolina plaintiff law firm. In a letter, Motley Rice commented “favorably” on receiverships and said Cape has demonstrated “a moral fraud perpetrated on the entire South Carolina court system.”
Another lawyer filed a letter explaining how he had used the receivership system to recover some $1.4 million for plaintiffs who sued convicted murderer Alex Murdaugh after he claimed to be broke.
Lawyers for Altrad, DeBeers and others argue Judge Toal must obey recent South Carolina Supreme Court orders requiring receivers to act only in specific cases and only to recover assets within the jurisdiction of South Carolina courts.
The court has also told Judge Toal receivers cannot enter the boardroom or control “business activities,” which would appear to preclude suing third parties as Protopapas has done in Cape’s name. A New Jersey federal court ordered Protopapas to back off after he attempted to prevent a company based in that state from filing for bankruptcy.
Judge Toal has repeatedly justified her receivership orders by ruling that insurance policies issued anywhere, to companies based anywhere, are “assets” subject to her jurisdiction. Cape, however, has no insurance and never did business in South Carolina, requiring Protopapas to seek money in other ways including suing Cape’s parent Altrad and other third parties.
At today’s hearing, Protopapas will argue in favor of a new appointment as receiver over Cape, as well as orders seeking extensive discovery against DeBeer and Anglo American. The defendants will argue in favor of ending his receivership.
