Feb. 27, 2007 — The Public Services Commission voted 5-1 Monday night to petition the Bankruptcy Court to be allowed to take what it sees as its rightful place at Innovative Communications Corp.'s (ICC) bankruptcy table and to seek authorization to approve or disapprove any court-appointed trustees in the matter.
Normally only the creditors and debtors have seats, but Jeffrey Moorhead, PSC legal consultant on telecommunications matters, contends the statute regulating the Public Services Commission is quite clear and "unambiguous." During Monday's meeting, held at Barbel Plaza office on St. Thomas, he said the Legislature knew what they were doing when they inserted the words "direct or indirect" into the law relative to the PSC's authority to oversee a transfer of ownership of regulated companies.
Although Judge Judith Fitzgerald has denied a prior petition from Moorhead because she said his argument regarding PSC authority was not convincing, Moorhead says once the commissioners themselves state that it is their policy that they must approve the appointment of any trustee even for a stockholder of the utility, she may have to reconsider her decision.
The PSC actually wants more than a place at the table; it wants to have authorization powers over decisions an appointed trustee might have where Jeffrey Prosser's cash cow Vitelco is concerned.
Moorhead said, "Vitelco is the only ICC company making money."
And when it comes down to the wire, Prosser — who along with ICC and Emerging Communications Inc. has declared bankruptcy — is likely going to have to sell the Virgin Islands' only land-based phone company to ward off his creditors.
The PSC wants to hold sway over how that process takes place and — in passing a motion that effectively interprets the current PSC statute to mean that any possible change of any kind to any company, even remotely related to the phone company, should require the PSC's approval – hopes the judge will agree.
One thing that was definitely agreed upon at the meeting was that Vitelco isn't in bankruptcy. It is the company's grandparents who are. That being said, the commissioners voted in favor of issuing an order relative to the V.I. code that would expand its ability to intervene in any potential sale of the publicly regulated company.
The lone dissenting vote, commissioner Joseph Boschulte said, "If Vitelco were involved in Bankruptcy Court, I would agree." But he added, "We publicly stated we weren't going to get involved" in the bankruptcy litigation between the parent and grandparent corporations and the creditors.
Moorhead claimed that Vitelco employees' pension plans, salaries and jobs could be swept aside by a trustee if the PSC doesn't serve as the watchdog.
At least one person at the meeting strongly disagreed with Moorhead's statement.
Attorney Daryl Dodson, the local representative for Prosser's biggest creditor, Rural Telephone Finance Cooperative, said Moorhead's report to the commission had "serious errors," specifically that a trustee in this instance could "alter pension plans or employee status."
Dodson also took exception to several administrative issues, including that he had never been notified about Monday's meeting and that as of three weeks ago a docket had not yet been established by the PSC for the ICC bankruptcy matter. He was never notified when the docket was opened.
Dodson wasn't the only one to object to the handling of Monday night's meeting. When the commission voted at the beginning of the meeting to go into executive session, thereby excluding the public, attorney Maria Tankenson Hodge, appearing on behalf of ratepayer Justine Flashman, who had also not been formally notified of the meeting, said, "I find it hard to believe that after making the case for the bankruptcy proceedings to take place in the Virgin Islands so the public knows what is going on, the commission calls for an executive session – without explanation."
Prior to the vote on the motion to expand the PSC statute, commissioner Donald Cole asked Moorhead if there was precedent for his opinion. The answer was no, but Moorhead said that didn't matter. "We are islands surrounded by thousands of miles of water," he said, reiterating that the Legislature had the foresight to leave the door open to go up the corporate ladder to assert its interest in any potential transfers of the utility or to have oversight on other matters pertaining to a public utility.
"The commission is obligated," Moorhead said, "to insert itself in the process."
Commissioners present at Monday's meeting were Joseph Boschulte, Cole, Verne David, M. Thomas Jackson, Alecia Wells, and Raymond Williams.
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