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HomeNewsArchivesBrief Calls for PSC's Moorhead to be Cited for Contempt of Court

Brief Calls for PSC's Moorhead to be Cited for Contempt of Court

Sept. 22, 2007 — Jeffrey B.C. Moorhead, hearing examiner for the V.I. Public Services Commission, should be held in contempt of court, according to papers filed Friday by the court-appointed trustee in the bankruptcy case of Innovative Telephone owner Jeffrey Prosser.
On Sept. 11, Moorhead ordered Prosser's companies not to cooperate with the trustee. According to the brief, "…the management of New ICC has improperly utilized the September 11 Order to continue to impede the Trustee's access to New ICC assets … its books and records and financial information."
U.S. Bankruptcy Court Judge Judith K. Fitzgerald repeatedly ordered Prosser and his companies to provide full financial information to her appointees: the trustee who is to manage Prosser's assets until they are sold or refinanced, and the examiner, who is to determine the status of Prosser's convoluted and secretive finances.
The trustee is Stan Springel, a West Coast businessman, and the examiner is Steven Felsenthal, a retired U.S. Bankruptcy Court judge. New ICC is the court's term for the Prosser holding company that runs his operating companies such as Vitelco and the Daily News.
As hearing examiner for the PSC, Moorhead's duties are to conduct fact-finding activities and report his conclusions to the commission.
Springel's lawyers have asked for an emergency hearing. According to the brief, "In the absence of emergency relief, the Trustee is concerned that assets of New ICC may be intentionally or inadvertently lost, destroyed, absconded with, and/or removed…." Emergency relief could take the form of the judge countermanding Moorhead's Sept. 11 order.
The brief stated that Moorhead's order was issued "without authority or justification… undermines the jurisdiction of this Bankruptcy Court, interferes with the administrations of these bankruptcy estates [Prosser's companies], and constitutes a blatant misuse of office… in contravention of the statutory limitations placed upon him and the governmental agency on whose behalf he purports to act."
In plain language, the brief said that as the PSC's hearing examiner, Moorhead cannot issue orders without holding hearings, and he should not try to countermand the judge's instructions.
Earlier in the bankruptcy proceedings, Moorhead had argued, in vain, first against the appointment of a trustee and more recently against giving the trustee the right to run Prosser's operating companies. (See "Judge Strips Prosser of Power Over Company Operations.")
Much of the trustee's filing was based on his lawyers' interpretation of Virgin Islands statutes and regulations, rather than on the argument that federal laws predominate over territorial ones.
For example, the brief argued that under V.I. law the PSC can make decisions regarding utilities only "after hearing and notice by order in writing" which it said was absent in this case.
Further, "Moorhead ordered what is effectively…injunctive relief… Hearing Examiners are expressly prohibited by Title 30 [of the island's statutes] from ordering this type of relief…"
Still, the brief referred to Moorhead's own earlier statement to the V.I. Legislature on the subject of federal vs. territorial law. The brief quotes Moorhead as saying: "Federal law supersedes anything this body does, senator…."
On the day before the trustee's filing, the PSC considered Moorhead's request to resign from the post of hearing examiner. Of the seven potential PSC votes, three were cast in favor of refusing to accept the resignation. Of the other four, one voted in favor of accepting the resignation, another abstained, another was absent, and a vacancy accounted for the final one.
The trustee's brief was filed by James J. Lee, a lawyer for the Dallas law firm of Vinson & Elkins, and by Benjamin A. Currence, a St. Thomas attorney.
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