Patience Runs out as Cape Reneges on Settlement Agreement
An announcement made on September 10, 2002, signals the end of the road for a £21 million (U.S.$31.5 million) settlement between Cape plc and thousands of South Africans injured by exposure to Cape asbestos. In December, 2001, a London Court approved a structured agreement whereby Cape would pay the sum of £11 million to an asbestos victims’ trust fund in South Africa; a further £10 million would be paid into this fund over the next ten years.
The original June 30th deadline for payment was not met; neither was the August 20th deadline. Solicitor Richard Meeran, who represents many of the 7,000 South African claimants, issued a public ultimatum on September 10th which confirmed that Cape had been given until September 14th to pay the first instalment. In his statement, Meeran explained that over the last few months the company had reiterated its commitment to the settlement but claimed that the financial reorganizations required to release the required funds had been time-consuming. It now appears that the Cape board has made a U turn and has cancelled the proposed sale of Cape’s Industrial Services Division:
"Cape had stated publicly that this sale was to produce the settlement money. Instead Cape decided (to) resort to borrowing the money. But according to Cape, its bankers will not lend Cape the money even though the banks have adequate security to cover such borrowing.
The proposed sale of Cape’s Manufacturing Division is expected to be approved at an Extraordinary General Meeting of Cape’s shareholders tomorrow. This sale will generate £5.6 million net cash for Cape. Cape and its bankers are apparently proposing that this money should be paid to the banks rather than the victims."
It is clear that the continual corporate stalling has finally exhausted the victims’ patience and goodwill. Meeran is determined to see the company honour its commitment: "We fully intend to see this through to the end to ensure their rights are enforced. In pursuing that objective, the net is likely to be extended beyond Cape Plc."
September 11, 2002