April 26, 2009 — Jeffrey Prosser, former owner and CEO of Innovative Telephone, has lost yet another court case — this one potentially worth $200 million.
The winner of the case in the Miami-based U.S. District Court for Southern Florida was the Government of Belize, and co-losers were Prosser's creditors, as they now own whatever claims Prosser had in this case. Prosser is in his third year of U.S. Bankruptcy Court proceedings.
Prosser had sought to purchase the monopoly phone company in that Central American country, invested tens of millions in the effort and then failed to make a large payment to close the deal. Belize then recaptured control of the firm, and the suits began.
Federal Judge Ursula Ungaro, who has been handling the case for the last four years, closed it March 26 with a "Final judgment in favor of Defendant [Belize] and against Plaintiffs" — what had been Prosser's firms.
There were no final arguments recently in the case, as the decision was based on one made earlier by the United Kingdom's Privy Council. That body, also called the Law Lords, is the supreme court for Belize, a former British colony. The U.S. Circuit Court of Appeals for the 11th Circuit had suspended an earlier decision of the Miami court to await the Law Lords ruling, which came down earlier this year. (See "Prosser Loses Another Court Battle Overseas.")
Court documents appear to indicate that both sides in the Miami case agreed to abide by the British decision. The Law Lords' decision against Prosser and for the Belize government was remarkable in the sense that no attorneys appeared for Belize, and the five judges (unanimously) supported the Belize government on the grounds of papers filed earlier in the trial.
According to observers, the new government of Belize — which is not the one that tried to sell the phone company to Prosser — appears to be moving toward eliminating the Law Lords as the nation's supreme court. Several other former British colonies, such as Australia, New Zealand and Fiji, have taken that step in the recent past. That may explain the lack of Belize lawyers in the most recent case.
Prosser initially secured a series of favorable rulings from Ungaro back in 2005, and at one time she laid down a $5,000-a-day penalty on Belize because, she felt, it had ignored some of her earlier, pro-Prosser rulings.
At this point the U.S. State Department's legal machinery rumbled into action. The departmental lawyers indicated they were not taking a position either for or against Prosser, but they were alarmed at the precedent that a judge could lay down a fine on a sovereign nation — Belize, in this case. What if overseas judges decided to impose such fines on the United States? they asked. With the 11th Circuit watching, Ungaro quickly eliminated the fine.
In a later ruling Ungaro decided against the underlying Prosser claim, and Prosser appealed to the 11th Circuit. It was then that the U.S. appeals judges decided that the final decision should not be made until the Law Lords had been heard. Prosser had sought a $200 million judgment against Belize for its actions against his interests.
The Law Lords' ruling related to earlier decisions made in the courts of Belize, but dealt with similar issues to those in the Miami case.
Jane W. Moscowitz of the Florida firm of Moscowitz & Moscowitz was the attorney for Belize in the Miami case, while Washington attorney Raymond G. Mullady, of Orrick, Herrington & Sutcliffe, spoke for Prosser. The Houston firm of Vinson & Elkins represented Stan Springel, the bankruptcy court-appointed trustee — and, indirectly, the creditors — in the case.
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