Oct. 3, 2007 — Over the protests of the lawyers of Jeffrey Prosser, owner and former CEO of Innovative Telephone, the federal judge hearing his bankruptcy case has tightened the court's control of a key Prosser holding company.
At Tuesday's hearing in Pittsburgh, the judge also reportedly approved making corporate money available for funding payroll and other benefits to rank-and-file workers in Prosser companies, but not to insiders such as Prosser and Holland Redfield II, Prosser's ranking spokesperson.
That information comes from one of the lawyers attending the hearing. Formal confirmation is expected to show up in the next few days in the court's electronic records, published on PACER, which stands for "public access to court electronic records."
The issue before U.S. Bankruptcy Judge Judith Fitzgerald Tuesday was whether the court would permit the appointment of a neutral trustee to manage the affairs of what it calls New ICC, the holding company totally owned by Prosser. It manages the firm's operating companies, such as Vitelco, the V.I. Daily News and a series of telecommunications firms elsewhere in the Caribbean.
Currently Stan Springel, a West Coast business executive, has trustee powers over two other Prosser holding companies. In the corporate hierarchy, both are more distant from the operating companies than New ICC.
Fitzgerald asked Springel and V.I. Attorney General Vincent A. Frazer to nominate a trustee for New ICC, and they both agreed, according to the lawyer attending Tuesday's hearing. In bankruptcy cases, it is standard practice for the judge to appoint the trustees, but usually after nominations from the U.S. Trustee, an office within the federal Justice Department.
Should this come to pass, it will mark the first substantive involvement of the territory's attorney general in the Prosser bankruptcy process since Frazer announced the replacement of Jeffrey B.C. Moorhead as the advocate of the V.I. Public Services Commission (PSC). (See "Attorney General Dismisses Moorhead as PSC Lawyer.")
Moorhead has filed a request with the judge for a four-week postponement of the contempt of court case currently scheduled for Thursday. Springel requested the contempt citation after Moorhead issued orders to Prosser's firms not to cooperate with Springel until the PSC ordered them to do so. Springel had argued that this was disruptive of the bankruptcy process and contrary to the judge's own orders.
One of Moorhead's arguments for the postponement was that, in his words on PACER, "I have been unable to locate counsel in the Virgin Islands, and will need additional time to travel outside the territory to do so." In other words, Moorhead says he has not been able to recruit another V.I. lawyer to defend his actions in the bankruptcy matter.
Neither the text of Tuesday's hearing nor the detailed significance of the decision about using corporate funds for compensating workers were available at time of publication.
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