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Trustee Finds New ICC Investment Banker; Prosser Accused of Harassing Ex-Valet

Sept. 7, 2008 — Stan Springel, the chapter 11 trustee in the bankruptcy case of Jeffrey Prosser, former owner and CEO of Innovative Telephone, wants to hire a new investment banker.
Springel is seeking court permission to use a Los Angeles-based firm to help him sell the various operating companies belonging to the bankrupt Innovative Communications Corporation. The firm is Houlihan Lokey Howard and Zukin Capital. In the past it has advised creditors' committees in such major financial disasters as those of Enron and WorldCom.
Springel has divided the corporate assets of ICC into three parts. Group one consists primarily of Vitelco and the V.I. cable operations, as well as other holdings. Group two includes companies active in Guadeloupe, Martinique and eastern France. The third group, consisting of the V.I. Daily News, was sold earlier for $5.25 million.
Houlihan Lokey has worked out a sliding scale of fees with Springel for the sale of the two sets of properties. If, for instance, group one goes for $350 million, the fee is $3.5 million. If the price is $400 million, the fee is $4.5 million. If the price is $500 million, the fee becomes $7.5 million. Anything above that figure will bring 5 percent of the additional "aggregate gross consideration" to the investment bankers.
The fees for the sale of the second group are also on a sliding scale, with, for instance, $1.2 million if they are sold for $40 million, and 5 percent more for any additional millions.
The court documents have given observers a hint at what Springel thinks the various corporate properties are worth.
Meanwhile there is a spirited battle about Prosser's former valet, Arthur Stelzer; his testimony against his former boss; and allegations that Prosser's agents are seeking to intimidate him.
As background, Stelzer, testifying in the U.S. courthouse on St. Thomas, has indicated that Prosser owned expensive watches that Prosser denied owing. (See "Question Remains: What is Prosser's and What is ICC's.") Further, Stelzer turned over a hard drive of a computer that had been used by Jeffrey and Dawn Prosser to James Lee, a lawyer for Springel, the court-appointed trustee.
The transfer of the hard drive is regarded by Prosser's lawyers as theft and "use of unauthorized personal information."
In the wake of this, Stelzer — who had previously been deposed [interviewed] by Prosser's lawyers — was served with a subpoena for a further deposition on short notice, a process described by Stelzer's attorney as follows:
"The pattern of harassment and intimidation continued …. On Aug. 9, Mr. Stelzer received threatening phone calls at his residence from a person representing himself to be a certified process server (a Jim Mueller) and a person representing himself to be a private investigator (a Jim LaRiviere), both of whom apparently were retained by Jeff Prosser or one of his counsel. Mr. LaRiviere is a private investigator based in Ohio who executed the proof of service. One must wonder why Jeff Prosser needed a private investigator to travel from Ohio to serve subpoenas in Florida. … In addition to this egregious activity, Mr. Mueller and one or more of his associates have apparently conducted surveillance of the Stelzers' residence. … these efforts are nothing more than a shameless attempt to pressure Mr. Stelzer to change his trial testimony."
Stelzer's lawyers have gone into federal court in West Palm Beach seeking to quash the subpoena, and Springel's attorneys have sought a protective order from the bankruptcy court to head off an effort by Prosser's lawyers to subpoena four people who appear to be friends of Stelzer and his wife.
Prosser's newest lawyer, Norman Abood (once jailed in Ohio for failing to pay his federal income taxes and subsequently allowed to return to the practice of law), has used the hard-drive incident and other claims of what he regards as inappropriate legal behavior by Springel and his attorneys in a sweeping effort to win the case for Prosser.
Abood seeks to dismiss Springel and his lawyers. He also wants the court to disregard Stelzer's previous testimony and dismiss arguments made by the trustee that Prosser's various residences are subject to seizure to pay the creditors. He also argues that Lee and his law firm, Vernon and Elkins, should "disgorge" all the fees they have been paid over the last couple of years.
The next two hearings on the case will take place in Pittsburgh Sept. 8 and 18.
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Sept. 7, 2008 -- Stan Springel, the chapter 11 trustee in the bankruptcy case of Jeffrey Prosser, former owner and CEO of Innovative Telephone, wants to hire a new investment banker.
Springel is seeking court permission to use a Los Angeles-based firm to help him sell the various operating companies belonging to the bankrupt Innovative Communications Corporation. The firm is Houlihan Lokey Howard and Zukin Capital. In the past it has advised creditors' committees in such major financial disasters as those of Enron and WorldCom.
Springel has divided the corporate assets of ICC into three parts. Group one consists primarily of Vitelco and the V.I. cable operations, as well as other holdings. Group two includes companies active in Guadeloupe, Martinique and eastern France. The third group, consisting of the V.I. Daily News, was sold earlier for $5.25 million.
Houlihan Lokey has worked out a sliding scale of fees with Springel for the sale of the two sets of properties. If, for instance, group one goes for $350 million, the fee is $3.5 million. If the price is $400 million, the fee is $4.5 million. If the price is $500 million, the fee becomes $7.5 million. Anything above that figure will bring 5 percent of the additional "aggregate gross consideration" to the investment bankers.
The fees for the sale of the second group are also on a sliding scale, with, for instance, $1.2 million if they are sold for $40 million, and 5 percent more for any additional millions.
The court documents have given observers a hint at what Springel thinks the various corporate properties are worth.
Meanwhile there is a spirited battle about Prosser's former valet, Arthur Stelzer; his testimony against his former boss; and allegations that Prosser's agents are seeking to intimidate him.
As background, Stelzer, testifying in the U.S. courthouse on St. Thomas, has indicated that Prosser owned expensive watches that Prosser denied owing. (See "Question Remains: What is Prosser's and What is ICC's.") Further, Stelzer turned over a hard drive of a computer that had been used by Jeffrey and Dawn Prosser to James Lee, a lawyer for Springel, the court-appointed trustee.
The transfer of the hard drive is regarded by Prosser's lawyers as theft and "use of unauthorized personal information."
In the wake of this, Stelzer -- who had previously been deposed [interviewed] by Prosser's lawyers -- was served with a subpoena for a further deposition on short notice, a process described by Stelzer's attorney as follows:
"The pattern of harassment and intimidation continued .... On Aug. 9, Mr. Stelzer received threatening phone calls at his residence from a person representing himself to be a certified process server (a Jim Mueller) and a person representing himself to be a private investigator (a Jim LaRiviere), both of whom apparently were retained by Jeff Prosser or one of his counsel. Mr. LaRiviere is a private investigator based in Ohio who executed the proof of service. One must wonder why Jeff Prosser needed a private investigator to travel from Ohio to serve subpoenas in Florida. ... In addition to this egregious activity, Mr. Mueller and one or more of his associates have apparently conducted surveillance of the Stelzers' residence. ... these efforts are nothing more than a shameless attempt to pressure Mr. Stelzer to change his trial testimony."
Stelzer's lawyers have gone into federal court in West Palm Beach seeking to quash the subpoena, and Springel's attorneys have sought a protective order from the bankruptcy court to head off an effort by Prosser's lawyers to subpoena four people who appear to be friends of Stelzer and his wife.
Prosser's newest lawyer, Norman Abood (once jailed in Ohio for failing to pay his federal income taxes and subsequently allowed to return to the practice of law), has used the hard-drive incident and other claims of what he regards as inappropriate legal behavior by Springel and his attorneys in a sweeping effort to win the case for Prosser.
Abood seeks to dismiss Springel and his lawyers. He also wants the court to disregard Stelzer's previous testimony and dismiss arguments made by the trustee that Prosser's various residences are subject to seizure to pay the creditors. He also argues that Lee and his law firm, Vernon and Elkins, should "disgorge" all the fees they have been paid over the last couple of years.
The next two hearings on the case will take place in Pittsburgh Sept. 8 and 18.
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.