Sept. 26, 2007 — A court-appointed bankruptcy trustee has fired Jeffrey Prosser as CEO of Innovative Communications Corporation.
Through a lawyer, trustee Stan Springel informed Prosser and the ICC board of directors that Prosser is no longer a member of the ICC board and thus no longer CEO. Prosser is to stop receiving any compensation, is not to be allowed to use "that certain 727 airplane, tail number N72EC," and is to be denied access to "the business premises and all books and records … and the operating subsidiaries," according to a letter dated Monday and written on Springel's behalf by Daniel C. Stewart of the Dallas law firm Vinson and Elkins.
Springel has taken the actions using powers granted him Sept. 7 by U.S. Bankruptcy Court Judge Judith K. Fitzgerald.
Stewart sent along a copy of the order in question, entitled "Order Approving Trustee's Use of Property of Emerging Communications, Inc., Estate Outside the Ordinary Course of Business" (also known as the "control order"). The letter was sent to Prosser care of his Rockville, Md.-based law firm, Shulman, Rogers, Gandal, Pordy and Ecker, and to the board of Innovative Communications Corp. (known to the court as the New ICC), care of the law offices of Kevin A. Rames in Christiansted.
As a result of his appointment by the court, Springel holds all the stock in ECI. It, in turn holds all the stock in the New ICC, which runs Prosser's operating companies. The trustee used the powers that go with stock ownership to remove Prosser from ECI's board and to fire him as CEO.
Springel also used these powers to make one other personnel change in the Prosser companies: He called for the dismissal of Holland Redfield II "as an officer of and spokesperson for New ICC." The firings of Prosser and Redfield, a former V.I. senator, were the only ones mentioned in the letter. There also was no indication in the letter that the membership of the board of directors of Prosser's firms would be changed, other than the removal of Prosser.
Late last week, in an entirely separate action, the U.S. Bankruptcy Court tightened its control on one of Prosser's holding companies. Redfield, then a Prosser spokesperson, said his side would appeal.
Following hearings in Pittsburgh, Fitzgerald agreed with a motion filed by the Greenlight Companies, one of the Prosser creditors, to give the court more control over the New ICC. This is the corporation that stands between Prosser's operating companies — such as Vitelco and the V.I. Daily News — on one hand, and, on the other, the two Prosser holding companies, which are the prime targets of the bankruptcy case.
Before his removal, Redfield told the Daily News that the Greenlight move was "an attempt to try to squeeze more money than was already agreed upon" by the parties, and that an appeal would be made. He did not specify if the appeal would be a re-hearing of the matter before the bankruptcy judge or an appeal to the U.S. District Court in St. Thomas.
Meanwhile, Prosser is in voluntary bankruptcy proceedings as an individual along with his holding companies, Innovative Communications Co. ("old ICC," in the court's eyes) and ECI. In his individual role, Prosser's lawyers filed a paper earlier this week promising to produce a plan of liquidation — i.e. a payment scheme — by Oct. 5.
The creditors regard this as a delaying action, those close to the case told the Source, designed to keep the Prosser case within the debtor-friendly confines of Chapter 11 of the Bankruptcy Act, rather than moving the action to the creditor-friendly Chapter 7, as the creditors are trying to do.
Under Chapter 7 rules, a court-appointed official would either secure refinancing or sell off the debtor's properties to raise money to pay the debts. Under Chapter 11, the "debtor in possession" — Prosser, in this case — would make such decisions.
It was not immediately clear how Prosser's termination will interact with the court's tightening of its control of New ICC and with Prosser's promise to file a liquidation plan; perhaps the former action will overshadow the other developments.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
