Oct. 1, 2007 — The shortfall of pension payments by Jeffrey Prosser's firms, such as Vitelco and the V.I. Daily News, is larger than previously reported, according to reports from a Sept. 21 hearing in U.S. Bankruptcy Court in Pittsburgh.
An earlier hearing revealed that the Pension Benefit Guaranty Corporation (PBGC), an arm of the U.S. Government, had filed about $10 million in liens against the Prosser companies for failing to fulfill pension obligations. (See "Judge to Open Documents to Public in Prosser Case.") At the most recent hearing, an attorney for PBGC, Eric Field, said "… our calculations based on the Sept. 15 contribution actually brings the lien amount up to approximately $15 million."
The Sept. 21 hearing also included a claim by one of Prosser's attorneys that the owner and former CEO of Innovative Telephone Co. doesn't keep his bank records. One of his lawyers defended Prosser against allegations that he has not cooperated with court-appointed officials on reporting the state of his finances:
"With respect to Mr. Gerber telling the Court that Mr. Prosser hasn't even provided his checking account, Mr. Prosser told Mr. Felsenthal — I was in the meeting with him — that he doesn't keep his records, and would — and his checks, he would send a letter to the bank (requesting the records) … he got a response from Bank of America telling him it's a very onerous process. It's going to take a long time. He's going to have to pay $5,000. He (Prosser) testified that he has done that."
The lawyer, Michael Licthenstein of the Rockville, Md., firm of Shulman, Rogers, Gandal, Pordy and Ecker, went on to say, "The other bank — I forget which on it was, perhaps Banco Popular — told him he has to pay $2,500 to get all his records. He testified that he has done that."
Gerber is Toby Gerber of the Dallas law firm Fullbright and Jaworski, who represents one of Prosser's major creditors, the Rural Telephone Finance Cooperative. RTFC is a non-profit bank that loaned Prosser's companies about half a billion dollars. Felsenthal, appointed to examine Prosser's finances for the court, is a former chief judge of the U.S Bankruptcy Court in Dallas.
Earlier in the same hearing, Gerber expressed skepticism about the claim that Prosser did not possess his own checking records: "It defies credibility that he didn't have copies himself, but he didn't even ask the banks to turn over those things until recently."
The bankruptcy court hearings will continue Tuesday in Pittsburgh, where the main agenda item is whether New ICC, like the other Prosser holding companies, will be placed in the hands of a court-appointed trustee.
There will be more hearings Thursday, in which the creditors are seeking a contempt-of-court citation against Jeffrey B.C. Moorhead, until recently a legal advocate for the V.I. Public Services Commission. V.I. Attorney General Vincent Frazer recently dismissed Moorhead as the PSC's attorney of record. (See "Attorney General Dismisses Moorhead as PSC Lawyer.")
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