Oct. 5, 2007 — Attorney Jeffrey Moorhead, hearing examiner for the V.I. Public Services Commission in the Jeffrey Prosser bankruptcy case, appeared before U.S. Bankruptcy Court Judge Judith K. Fitzgerald Tuesday in Pittsburgh to explain why he should not be held in contempt of court, and was granted a four-week continuance. (See "Brief Calls for PSC's Moorhead to be Cited for Contempt of Court.")
Stan Springel, the trustee appointed by the court to oversee Innovative Communications assets during its original Chapter 11 bankruptcy proceedings, filed the motion in response to Moorhead ordering ICC officials not to cooperate with the trustee.
George W. H. Phillips, who recently replaced Moorhead as the government attorney representing the PSC before the bankruptcy court, (See "Attorney General Dismisses Moorhead as PSC Lawyer.")
filed a brief outlining the official V.I. government and PSC position on the issue.
Phillips’ filing on behalf of the PSC repudiated Moorhead, declaring he has never been authorized to represent the PSC.
“The appointment of Attorney Moorhead as the legal representative of the Public Service Commission was done without consultation or approval by the Attorney General of the Virgin Islands,” Phillips wrote, stating that the appointment violated V.I. law and that Moorhead was not authorized by the Attorney General to represent the PSC.
Phillips also said Moorhead’s orders, which led to the contempt motion, never had any legal weight and had been withdrawn by Moorhead.
“Attorney Jeffrey Moorhead, as the Hearing Officer of the PSC, had no authority to issue the PSC orders,” wrote Phillips. “The Orders signed by Attorney Moorhead as Hearing Examiner are null and void as they are not Orders of the Commission.”
The government brief took no position as to whether it supported or opposed finding Moorhead in contempt of court.
Moorhead filed two briefs on his own behalf Tuesday; one directly responding to the contempt of court charges and a second asking for a four-week continuance. In his written response to Springel’s contempt charge, Moorhead argued he acted in good faith to preserve the legitimate authority of the PSC. He reiterated the PSC position that under V.I. law, the trustee must get permission from the PSC because ICC owns Vitelco, a PSC regulated utility, and V.I. law requires PSC permission prior to even an indirect transfer of control.
To support that position, he cited a February 2006 ruling in the U.S. District Court for the Virgin Islands, quoting passages from Judge Curtis V. Gomez that appear to support the idea that the PSC must give prior approval for any change in control over parent companies of a regulated utility.
“Accordingly, the PSC will have to authorize a transfer of control of the public utility,” Moorhead quotes Gomez, in part.
But in the case Moorhead cited in his defense, Vitelco v. RTFC et al, the judge actually ruled against Vitelco on the very argument Moorhead and the PSC have been making ever since.
“(A)ssuming a trustee is appointed for an indirect parent of Vitelco, such as ICC,” Gomez wrote, “this Court has not been presented with any persuasive explanation why such appointment would directly or indirectly transfer control of Vitelco, an independent subsidiary. Indeed it is well settled that absent unusual circumstances, the property of the debtor’s subsidiary is not considered property of the debtor by virtue of the debtor’s sole ownership of the subsidiary … At most, the appointment of a trustee over (Emerging Communications) or (ICC) may remotely affect Vitelco.”
In his motion for a continuance, Moorhead produced evidence he had emailed all the parties, withdrawing his two contested orders. He wrote in his brief to the court he had expected Springel to withdraw his contempt motion once the orders were withdrawn and was surprised to find the motion still in effect. He argued he needed the continuance in order to find legal representation.
Moorhead’s email rescinding his two orders directing the trustee not to take control of ICC ironically concludes by again saying the trustee may not take control of ICC and ICC officials are not to cooperate.
“In rescinding the March 26 and September 11 Hearing Examiner’s Orders, all parties are advised that they should comply with the Commission’s February 27th (sic) Order,” Moorhead wrote. That PSC order, signed by Alecia Wells on Feb.26, not Feb. 27, takes the same position as Moorhead’s two rescinded orders.
“The fact that the statute is clear on its face,” the PSC order reads, “and does not make any exception for how such a transfer comes about convinces us that the prohibition is absolute and that the Virgin Islands Legislature meant to require all transfers receive the prior approval of this body. … Without such pre-approval, the appointment (of the trustee) is void.”
The PSC issued this order two weeks after Vitelco made the same argument in court before Gomez and lost.
Valid or not, that February PSC order may not exist much longer. In his brief on behalf of the PSC, Phillips wrote that the PSC “is expected to meet on or about Oct. 9 to rescind, alter or amend its order of Feb. 26.”
The court granted Moorhead’s motion to continue the contempt hearing for four weeks.
In a related matter, before delving into testimony during Wednesday's Government Operations and Consumer Protection Committee meeting, senators quickly approved a motion to subpoena members of the PSC and Moorhead to appear before the Legislature to give testimony about the status of various telecommunications matters — namely, the ongoing legal battle between Jeffery Prosser and his creditors.
The motion came after Moorhead and PSC representatives failed to show up at a Senate hearing held earlier this week. Springel and ICC officials also failed to appear, for varying reasons. (See "Senators Discuss Revamping PSC After No-Shows at Hearing")
Voting in favor of issuing the subpoenas were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Shawn-Michael Malone, Basil Ottley Jr. and Alvin L. Williams.
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.
