Well Marie, if they are friends of the family, then they should understand the fear you have now of being outside with Caramel and I don't see how they could be offended. She did come over to see if you were okay and was sorry about what had happened. So she seems that she could be reasonale. I also think your friend should invest in a much stronger chain if their dog keeps breaking the ones he has now. Is there any way that a fence could be built? Is this dog chained up all the time? Does he get enough attention from the family? (Sorry for all the questions.)
Since he is still pup, I don't think he meant to do any harm to Caramel. It sounds like he just wanted to play.

I hope you do talk to your neighbour and hope that some kind of agreement can be arranged. I just hate the thought of your poor kitties having to stay inside when they are use to having some pleasure being outside.

Please keep us updated, okay.