Nov. 14, 2007 — Attorneys for those with claims against Innovative Communications Corp. or Jeffrey Prosser — ICC's owner and former CEO — pored over Prosser's personal and company assets in court Wednesday, peppering him under oath about how he arrived at his numbers and portraying some transactions as inappropriate mingling of corporate and personal money.
Prosser is in involuntary Chapter 7 bankruptcy and ICC — parent company to Vitelco, Innovative Cable, TV Channel 2 and other local companies — is in Chapter 11.
Some of the sharpest questioning came from Jeffrey Greendyke, attorney for the Rural Telephone Finance Cooperative (RTFC). Prosser personally owes the RTFC $100 million, and ICC owes RTFC several hundred million more.
Greendyke questioned Prosser about a jet, chartered earlier this year by Prosser and paid for by ICC. The bill for the use of the jet was $64,000, Prosser said, but he said the real amount is less because it includes charges for an engine repair for which the company was later reimbursed. The jet was rented for a trip designed to bring business to St. Croix, Prosser said.
"Who was on the plane?" Greendyke asked.
"As I recall, my wife and I," Prosser replied.
"It was a round-trip ticket," Greendyke said. "Did you bring anyone back with you, any business?"
"I don't recall, but that is what it was," Prosser said.
Greendyke said Prosser had previously declared his wine collection to be worth more than $3 million, but in his most recent financial statements to the court, Prosser claims it is worth less than $200,000.
"Has there been a drop in the market for wine?" Greendyke asked. "Or did you just consume it?"
"A lot of wine was used at the millennium party," Prosser said. "A lot of the wine was consumed, yes."
Greendyke read a list of construction contractors specializing in high-end home tile and bath works and other luxury-home amenities.
"Would it surprise you if I said the books of New ICC showed payments of over $2 million to those individuals?" he asked.
"If that is what the documents say," Prosser said.
"You recognize the Artisan company (one of the listed contractors) as having done work on the main house in St. Croix?" Greendyke said.
"I don't know," Prosser said.
"Was that work you allowed to be done on St. Croix a gift to your wife, Dawn?" Greendyke asked. There was a long silence, filled eventually by a question from Prosser's attorney, Robert Craig.
Prosser was subdued for most of the meeting, fidgeting a bit. He gave brief, simple, polite replies to most of the questions, but later grew testy as some of the more pointed questions were rephrased and restated by new questioners.
"I already answered that," he said in an angry tone several times.
James P. Carroll, court-appointed trustee of Prosser's personal assets in the Chapter 7 case, was there with attorney Jeffrey K. Cymbler, who asked most of the questions. Cymbler questioned how Prosser arrived at the values of some of his land holdings in New York and Florida.
"Your house in Lake Placid is listed at $1,390,000," Cymbler said. "How did you arrive at that?"
"Just talking to the real estate agency," Prosser said. "And it had recently been reappraised for taxes."
Cymbler asked about a house Prosser owns in Palm Beach, with a listed value of $8,714,000.
"You list it as having approximately $5 million in secured debt," Cymbler said, then asked how much the monthly payment was and whether the payments were current.
The payment is $27,000 per month and he is one month behind, Prosser said. He said he is not currently employed and has no income.
Cymbler asked if Prosser planned to pay on the mortgage.
"Without any income, no," Prosser said.
Wednesday's testimony was an information-gathering exercise, giving Prosser's and ICC's creditors an opportunity to question Prosser under oath about his and his company's finances. Thursday there will be a hearing in the U.S. Bankruptcy Court on St. Thomas before Judge Judith Fitzgerald to address several motions and counter motions regarding the status of ICC and Prosser's property under both his personal Chapter 7 bankruptcy and ICC's ongoing Chapter 11 bankruptcy proceedings.
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