Toxic Justice: S.C. Supreme Court Upholds Asbestos Receivership System

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by JENN WOOD

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For years, South Carolina’s sprawling asbestos litigation system has operated under an opaque legal authorization critics contend grants extraordinary power to court-appointed receivers operating outside the lines – while remaining firmly ensconced in one of the nation’s most incestuous judicial ecosystems.

This week, the Palmetto State’s supreme court largely endorsed that shady system.

In a sweeping opinion (.pdf) issued Wednesday morning (May 27, 2026), the high court upheld the controversial receivership structure surrounding Cape Intermediate Holdings Limited (CIHL) — the successor entity to Cape Asbestos — a defendant which had challenged the legitimacy of the docket. Simultaneously, justices rejected an aggressive international challenge brought by corporate defendants who were attempting to dismantle the arrangement.

The ruling in Tibbs v. Asbestos Corporation Limited preserved the authority of powerful court-appointed receiver Peter Protopapas – who is now authorized to continue pursuing insurance assets and affiliated corporate entities in connection with South Carolina asbestos claims, a process critics claim stretches traditional receivership law far beyond its historic limits.

While the decision marked a clear victory for Protopapas – and a major validation of the legal infrastructure underlying one of the most consequential mass-tort systems operating anywhere in the world – the opinion did at least attempt to impose some guardrails on the docket.

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A SYSTEM UNDER SCRUTINY

The dispute stems from ongoing asbestos litigation pending in Richland County, where plaintiffs have accused numerous companies of exposing workers and consumers to asbestos-containing products over decades.

As FITSNews has previously reported in its ‘Toxic Justice‘ series, the asbestos docket has evolved into far more than a conventional toxic tort system. At the center of that evolution is the growing use of receiverships — court-supervised mechanisms traditionally used to preserve assets in extraordinary circumstances.

In recent years, South Carolina courts have increasingly allowed receivers to step into the shoes of dormant or foreign asbestos defendants to investigate insurance assets, pursue affiliated companies and preserve funds potentially available to future claimants.

One of the most prominent receivers appointed in that process has been Protopapas — a politically connected figure who simultaneously serves on the South Carolina Judicial Merit Selection Commission (JMSC), the legislative body responsible for screening judges.

That overlap has fueled mounting criticism from defendants and tort reform advocates who argue the asbestos system has become an insular network of judges, receivers and politically influential attorneys operating with limited outside scrutiny.

Wednesday’s ruling effectively keeps that structure intact.

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THE INTERNATIONAL FIGHT OVER CAPE

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The case focused on CIHL — an English corporate successor tied to Cape Asbestos, a historic asbestos manufacturer.

Defendants argued South Carolina courts lacked authority to place the company into receivership and pointed to decades-old English court rulings that had previously rejected attempts to enforce certain American judgments against Cape entities overseas.

That international clash escalated dramatically in 2024 when the High Court of Justice for England and Wales issued an injunction purporting to bar Protopapas from acting on behalf of Cape entities anywhere in the world.

The Palmetto State’s high court responded forcefully. Writing for the court, justice D. Garrison Hill rejected the notion that English rulings applying English law could dictate whether South Carolina courts possess jurisdiction under American law.

“We cannot imagine a more misguided view of comity,” the opinion stated.

The court went even further — suggesting the English court itself would likely be “horrified” by how defendants were attempting to weaponize its ruling inside South Carolina litigation.

In one of the opinion’s sharper passages, the court also dismissed years of corporate restructuring arguments aimed at distancing current entities from historic asbestos liabilities.

“The music has stopped on appellants’ name games,” Hill wrote.

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RELATED | TOXIC JUSTICE

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DRAWING SOME LIMITS

While the ruling largely upheld the receivership structure, the justices did not grant asbestos courts unlimited authority.

The supreme court specifically rejected one rationale used by the lower court — finding insufficient evidence that Cape was actually in imminent danger of insolvency.

Instead, the court upheld the receivership under broader equitable powers allowing intervention in “extreme cases,” particularly where there are allegations companies may be concealing or shielding assets responsive to future judgments.

The opinion also attempted to narrow the scope of pre-judgment receiverships moving forward.

Importantly, the court warned that receivers should not automatically operate across multiple lawsuits without specific authorization in each case — a direct response to concerns raised in the court’s earlier Welch decision regarding the expanding reach of asbestos receiverships.

Still, the broader framework survived – and that may be the most important takeaway.

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WHY THIS MATTERS

Had the defendants prevailed, the ruling could have destabilized years of asbestos litigation strategy in South Carolina. Instead, the justices largely validated the core theory underpinning the state’s asbestos receivership system: that courts may intervene before judgment when there is evidence corporate restructuring or asset transfers could frustrate future asbestos recoveries.

That authority carries enormous implications not only for asbestos defendants — but for the broader debate over judicial power, receiverships and political influence inside South Carolina’s civil justice system.

The ruling also arrives as scrutiny surrounding the asbestos docket continues to intensify.

FITSNews has previously documented concerns involving sealed settlements, opaque fee structures, overlapping political relationships and the concentration of authority among a relatively small network of lawyers, judges and court-appointed officials.

Wednesday’s opinion does not end those questions. But it does ensure the system itself will continue operating — now with the explicit backing of South Carolina’s highest court.

And for critics who hoped the judiciary might finally impose meaningful structural limits on the asbestos machine, the ruling likely represents something else entirely: proof that the machine is not slowing down.

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THE ORDER…

(S.C. Supreme Court)

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ABOUT THE AUTHOR …

As a private investigator turned journalist, Jenn Wood brings a unique skill set to FITSNews as its research director. Known for her meticulous sourcing and victim-centered approach, she helps shape the newsroom’s most complex investigative stories while producing the FITSFiles and Cheer Incorporated podcasts. Jenn lives in South Carolina with her family, where her work continues to spotlight truth, accountability, and justice.

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