Document MpMLox1dqEgEyZOwgYRqjgK7

FILE NAME Cape Asbestos CAPE DATE 2023 Oct 13 DOC CAPE193 DOCUMENT DESCRIPTION Affidavit of James T.H. Buxton Esq Legal - Tibbs Case Exhibit A ELCTRONIAY Se STATE OF SOUTH CAROLINA Nee ee Neue AFFIDAVIT FILED COUNTY OF CHARLESTON Nee! seme - 2023 PERSONALLY APPEARED BEFORE ME James T. H. Buxton Esq who deposes and Oct 18 stated as follows 1:13 1. I have been requested by counsel for Third Party Plaintiff Cape PLC by and through its PM - duly appointed Receiver Plaintiff to express my professional opinion as an expert in matters RICHLAND relating to factual issues bearing on Plaintiff's causes of actions against third party defendants the - Third Party Defendants based upon personal jurisdiction veil piercing alter ego amalgamation and successor liability Certain Third Party Defendants have filed motions to COMON dismiss for lack of personal jurisdiction PLEAS - 2. It is the Court's prerogative to make legal determinations and the opinions expressed herein remain subject to that prerogative This affidavit is meant to highlight facts and issues I believe are worthy of the Court's consideration with respect to the Plaintiff's claims and expressing 203CP41759 opinions on those matters which I deem appropriate as an expert witness in light ofmy knowledge background training and experience Background and Qualifications 3. My qualifications to give expert evidence include the following a I graduated from the University of South Carolina School of Law in 2002 with a Juris Doctorate and I graduated from Princeton University in 1995 with an A.B. in History b I was admitted to the State Bar of Georgia in 2002 the Virginia State Bar in 2006 and the South Carolina Bar in 2007 c Immediately following graduation in 2002 I was as an attorney for Alston & Bird LLP in Atlanta Georgia from 2002 until 2005 where I worked in the Capital Markets ELCTRONIAY practice group and was primarily responsible for corporate governance matters in a wide FILED - 2023 variety of public and private corporate transactions securities transactions regulated by the Securities Act of 1933 as amended and the rules promulgated thereunder- Oct 18 -and as ongoing outside general counsel for corporate clients From 2005 until 2007 I 1:13 worked as an attorney for Hunton & Williams LLP in Richmond Virginia in a similar PM - capacity RICHLAND d In 2007 I moved to Charleston South Carolina and worked as an attorney at - Young Clement Rivers LLP in the role of Special Counsel where I continued to represent clients in various business transactions and corporate governance matters COMON e In 2008 I taught Mergers & Acquisitions as an Adjunct Professor at the Charleston PLEAS School of Law in Charleston South Carolina - CASE f On May 10 2010 I started my own law practice now known as Buxton & Collie LLC in Mount Pleasant South Carolina where I am currently employed My practice 2023CP4001759 203CP41759 focuses on corporate governance private securities offerings business transactions and general corporate law matters g Since 2018 I have served on the South Carolina Bar's Corporate Banking & Securities Committee and am currently Vice Chair h In 2018 I authored the South Carolina Business Law Handbook A Practical Guide for Business Owners Entrepreneurs and Their Counsel published by the South Carolina Bar i I serve on the Governing Council of the South Carolina Law Institute the SCLI commissioned by the South Carolina General Assembly and based at the University of ELCTRONIAY South Carolina School of Law The SCLI is a law revision and advisory group to the state FILED - 2023 legislature and I was selected to serve as an advisory representative with respect to corporate law matters Oct 18 1:13 j am familiar with the South Carolina Uniform Commercial Code as amended codified at S.C. Code 36-1-101et seq the South Carolina Uniform Commercial Code PM - k I am familiar with the South Carolina Business Corporations Act of 1976 as RICHLAND amended the South Carolina Business Corporations Act - 1. I am familiar with the South Carolina Uniform Limited Liability Company Act of 1996 as amended codified at S.C. Code 33-44-101 et seq the South Carolina LLC COMON Act PLEAS - m I am familiar with the South Carolina Uniform Limited Partnership Act as CASE amended codified at S.C. Code 33-42-101 et seq the South Carolina Limited Partnership Act 2023CP4001759 203CP41759 Information Considered 4. In evaluating this matter I have relied on the facts alleged in the Third Party Complaint the materials of record filed with the Court by the parties involved including the exhibits supplied by counsel for the Plaintiff referenced in its Third Party Complaint available public records the relevant above statutes and South Carolina and Federal case law related to various legal theories ascribed to the causes of action pleaded in this matter including without limitation i Personal Jurisdiction This very Court has opined that personal jurisdiction can be properly asserted over a corporation not physically present in the forum state if ELCTRONIAY another with sufficient minimum contacts is acting as its alter ego Hagan v Armstrong FILED - 2023 International 2020 S.C. C.P. LEXIS 649 see also In re North Dakota Personal Injury Asbestos Litigation 737 F. Supp 1087 1094 D.N.D. 1990 citing Lakota Girls Scout Oct 18 1:13 Council Inc. v Havey Fund Man Inc. 519 F.2d 634 637 8th Cir 1975 Further this Court has acknowledged that there is limited South Carolina case law on the issue of PM - alter theory conferring personal jurisdiction ... ... " but " is a given that when a court RICHLAND has engaged in traditional veil piercing the court may exercise personal jurisdiction - vicariously over an individual if the court has jurisdiction over the individual's alter ego company Id 6 The entire point of the alter doctrine is that a defunct dissolved COMON or undercapitalized entity is responsible for causing injury But because that entity is PLEAS - dominated or controlled by others and exercises no control of itself others are then liable Hagan at 14 ii S.C. Code 36-2-803Aand Due Process In the application of the South 203CP41759 Carolina Long Arm Statute if the statute authorizes jurisdiction then the court must determine if that assertion is consistent with due process by testing for two components ) minimum contacts and ii fairness Duong v NA Transportation Servs LLC 2019 U.S. District LEXIS 241092 13 see also S.C. Code 36-2-803A iii Specific Jurisdiction In considering specific jurisdiction a South Carolina court must consider ) to what extent did a defendant purposefully avail itself of the privileges of conducting activities in the forum state 2 whether the plaintiff's claims arise ELECTRONICAL Y ELECTRONICALY out of those activities and 3 whether the jurisdiction is reasonable See generally Duong v NA Transportation Servs LLC 2019 U.S. District LEXIS 241092 ELCTRONIAY iv Amalgamation or the single business enterprise SBE theory applies FILED - 2023 when ) the various entities operations are intertwined and there is ii further evidence of bad faith abuse fraud wrongdoing or injustice resulting from the blurring of the Oct 18 entities legal distinctions See Walbeck v I'On Co. No. 28134 S.C. Feb. 8 2023 citing 1:13 Pertuis v Front Roe Rests Inc. 423 S.C. 640 655 817 S.E.2d 273,280-281 see also PM - Kincaid v Landing Dev Corp. 344 S.E.2d 869 874 S.C. Ct 1986 In recognizing RICHLAND the SBE theory the South Carolina Supreme Court agreed with the standard set forth by - the Texas Supreme Court in a two prong test 1. With respect to the first prong such factors to be considered include COMON but are not limited to the following common employees common offices PLEAS centralized accounting payment of wages by one corporation to another - corporation's employees undocumented transfers of funds between corporations and unclear allocations of profits and losses between corporations Pertuis 423 203CP41759 S.C. at652 and 2. As to the second prong there must be evidence of wrongdoing such as fraud evasion of existing obligations circumvention of statutes monopolization criminal conduct and the like Id at 654-655 See also SSP Partners v Gladstrong Invs USA Corp. 275 S.W.3d 444 445 Tex 2008 v Piercing the Corporate Veil Those who abuse the corporate form may have the veil of limited liability pierced such that the individual owners of the respective corporate entities may be individually liable for their actions See generally Sturkie v Sifly 280 S.C. 453 313 S.E.2d 316 1984 Factors a court applies in testing the veil piercing theory include whether the entity ) was undercapitalized ii failed to observe corporate ELCTRONIAY formalities iii paid no dividends iv was insolvent v lacked corporate records vi FILED - 2023 had its corporate funds siphoned off by a dominant shareholder and vii was used as a mere fa^adefor operations of its dominant stockholders See Id at 457 Oct 18 1:13 5. Based upon allegations asserted and the supporting materials referenced in the Third Party Complaint it may be reasonably concluded that ) the Third Party Defendants directly or PM - indirectly through their agents and ownership purposely availed themselves of activities in South RICHLAND Carolina including but not limited to selling products they knew created harm ii the sale and - use of these products by South Carolina citizens gave rise to the causes of actions in the instant related matter of John A. Tibbs and Margaret Tibbs v 3M Company et al and iii South Carolina COMON is an appropriate jurisdiction in which to resolve claims under that case caption as well as PLEAS Plaintiff's claims - 6. This instant matter involves a unique scenario with respect to the duly appointed Receiver 203CP41759 for Cape PLC a successor in interest to the owner of North American Asbestos Corporation NAAC from which there was alleged to be a siphoning out of profits to overseas entities and leaving NAAC undercapitalized and underinsured resulting in the inability to compensate South Carolina citizens harmed by Cape PLC and its direct and indirect agents Further as alleged in the Third Party Complaint the Third Party Defendants received the benefit of siphoned funds from these respective entities which acted as direct and indirect agents of the Third Party Defendants 7. is one matter for a third party to plead facts necessary to support a viable claim for alter ego theory conferring personal jurisdiction It is quite another matter when the facts pleaded for such a viable claim by the Third Party Plaintiff are made by and derived from within the complex corporate structure itself Often the alter ego theory in corporate law is explored by courts in the subsidiary relationship for vertical veil piercing because this is the manner in which it is ELCTRONIAY most commonly presented before courts It should not however limit the scope of review or the FILED - 2023 relative doctrine's applicability Certain of the Third Party Defendants motions rely on this narrow interpretation in stating that corporate veil piercing can only be used to establish jurisdiction Oct 18 1:13 over a parent entity when the court has jurisdiction over the subsidiary entity . and provides its own emphasis in citing Duong See e.g. Anglo American US Holdings Inc. Motion to Dismiss PM - p 3. In clinging to this added emphasis Third Party Defendants want the Court to stop the analysis RICHLAND there and not only ignore the intentional actions of Cape PLC's parent entities but the intentional - actions of its grandparents aunts uncles cousins and entity kin of any kind A dismissal at this stage of pleadings would only embolden domestic and international abuse of our system of COMON corporate jurisprudence in South Carolina a system ultimately established for the benefit of its PLEAS citizens and not for use in purposefully harming them If jurisdiction is authorized over the - subsidiary NAAC then the Court may exercise jurisdiction over Cape PLC as the successor in interest to NAAC's owner even assuming Cape PLC's contacts alone were not sufficient to 203CP41759 exercise personal jurisdiction If Cape PLC itself had an alter ego then logical jurisprudence follows that the Court may extend its exercise ofjurisdiction in the corporate maze until there is a responsible party or parties found who actually in fact exert control over the acts of the subsidiary Duong 31 citing Mylan Labs Inc. v Akzo N.V. 2 F.3d 56 61 4th Cir 1993 see also CAPE000141-143 CAPE 000152 CAPE000351-356 CAPE000550-551 CAPE000701 CAPE000728 In determining the ultimate controlling party or parties in circumstances involving a complex corporate structure as in this instant matter a Court should extend its jurisdiction to the outer limits allowed by the Due Process Clause regardless of the potential multiple layers of alter ego entities or geographical boundaries Id at 13 ELCTRONIAY 8. The amalgamation theory is focused on the intertwining of corporate relationships which FILED - 2023 may be referred to as horizontal veil piercing The Third Party Defendants in this instant matter want the world to believe and the court to presuppose that complexity and time are reasonable Oct 18 defenses to a repeated pattern of corporate misconduct The facts as pleaded by the Plaintiff create 1:13 a reasonable belief that the Oppenheimer American conglomerate PM - systematically and intentionally created myriad affiliate entities to perpetuate ) the mining RICHLAND manufacturing distribution and sale of known harmful asbestos products to the world ii - purposefully undercapitalized and underinsured the affiliate entities and iii siphoned funds through playing an intentional corporate shell game of domestic and international jurisdictional COMON hopscotch to avoid existing and future liabilities In reviewing the totality of the facts in this matter PLEAS - Plaintiff has pleaded in detail the connected the ownership structure and the intertwined nature of the Oppenheimer American corporate conglomerate See CAPE000110- 112 see also Charter 1966 Annual Report 1967 Annual Report and 1970 Annual Report see 203CP41759 also Anglo 1974 Annual Report 1976 Annual Report and 1979 Annual Report See also Anglo American Group 2022 Annual Report SUMMARY OF ENTITY MANIPULATION FACTS 9. The Defendants respective Motions to Dismiss each assert that there is no general personal jurisdiction or specific jurisdiction through a corporate piercing or alter ego theory however the Receiver for Cape PLC is asserting its causes of actions from its unique position within the very alleged amalgamated enterprise and supported by detailed corroborative facts in its referenced exhibits See CAPE 000123 CAPE 000152 CAPE 000154 CAPE 000166-67 CAPE 000333. It is my belief that the Third Party Complaint sets forth sufficient facts to state a prima facie case of 1 domination and control and 2 harm arising from the same for a potentially viable claim under ELCTRONIAY an alter theory among the amalgamated owners of Cape PLC FILED - 2023 10. The facts as alleged by the Plaintiff further appear sufficient to connect NAAC to South Carolina and Cape PLC as the successor in interest to and exercising control over NAAC The Oct 18 1:13 facts as alleged further support that Cape PLC was the alter ego of a larger parent company conglomerate the members of which were conceivably direct or indirect beneficiaries of the PM - business activities of Cape PLC and NAAC while there was ongoing harm and wrongdoing RICHLAND suffered by citizens of South Carolina To stop the veil piercing analysis at this initial phase of - litigation with the facts as presented reasonably connecting the collective Third Party Defendants to the causes of action arising out of South Carolina viewed in the light most favorable to the COMON Plaintiff's claims may be fundamentally unfair to the equitable adjudication of the harm to South PLEAS - Carolina citizens alleged in this matter and validate and complete the Third Party Defendants alleged total decades collective liability avoidance scheme 203CP41759 11. Further when a complex liability avoidance scheme is put in place by a sprawling corporate enterprise to protect its assets from liability resulting from known foreseeable harm caused by the manufacture distribution and sale of its products then the entire total enterprise should be examined with respect to the Receiver's marshaling of assets to effectuate its responsibility In this matter I believe the Plaintiff asserts sufficient facts to establish Cape PLC as the successor in interest to the owner ofNAACfurther I believe Plaintiff also alleges sufficient some even derived from annual reports and corporate records of Cape PLC itself and its controlling entities show that the amalgamated ownership of Cape PLC was intertwined and inter alia there was ongoing purposeful avoidance of existing obligations and known liabilities arising from asbestos exposure See CAPE000550-51 CAPE 000593 CAPE 001035. Therefore this court is uniquely situated to consolidate discovery of the complex structure of the ELCTRONIAY Oppenheimer American corporate conglomerate once and for all with FILED - respect to the veil piercing analysis 2023 12. The opinions in this affidavit are given to a reasonable degree of certainty as a lawyer Oct 18 skilled in business corporations partnerships and limited liability companies and are based 1:13 specifically on the materials discussed above or the lack of evidence to the contrary of the opinions PM - herein I reserve the right to alter amend modify reduce or expand these opinions if and when RICHLAND additional information is presented for my review - FURTHER AFFIANT SAYETH NOT COMON PLEAS - SWORN to before me this 13th day 203CP41759 ofOctober 2023 MCLAUGH Notary Public for South Carolina 203CP401759 My Commission expires 04/29/2025 04/29/2025 04/29/2025 STATE OF SOUTH CAROLINA \ OF SOUTH 10