May 27, 2009 — There's a new judge involved in the litigation surrounding the bankruptcy trials of Jeffrey Prosser, former owner and CEO of Innovative Telephone — and his honor sounds irritated.
He's U.S. Magistrate Judge George W. Cannon Jr., who works with the U.S. District Court on St. Thomas and helps U.S. District Court Judge Curtis Gómez with the case that Prosser has brought against his creditors and others under the Racketeer Influenced and Corrupt Organizations (RICO) Act. This litigation is separate from the three-year-old proceedings in the bankruptcy courts.
One of Prosser's allies in the RICO case is his bankrupt friend John P. Raynor, once a director of one or more of Prosser's corporations. Raynor moved to disqualify a major mainland law firm, Hogan & Hartson, that has been retained by Prosser's principal creditor and the about-to-be new owner of Innovative Telephone, the National Rural Finance Cooperative. NRFC, in turn, is a wing of the Virginia-based non-profit bank the National Rural Utilities Cooperative Finance Cooperative, an entity that lent Prosser's firms more than half a billion dollars.
Raynor argued that Hogan & Hartson had conflicts of interest in the case and should be barred from the courtroom.
Before Cannon tore Raynor's arguments apart one by one, he had this to say in a recently released order:
"Before reaching the merits of the motion, the Court notes that Plaintiffs [e.g., Raynor and allies] combine no less than three motions in one. If that were not enough, Plaintiffs then add another motion to their reply to Defendants' [e.g., RTFC's] response in opposition. This Court repeatedly has advised counsel that motions are not to be combined with other motions or responsive documents. Any future disregard of the Court's policy will result in the immediate denial, without prejudice, of the combined motion with an instruction to re-file as separate documents and may result in the imposition of sanctions."
Denying a motion without prejudice means that under appropriate circumstances it may be made again.
When lawyers make spelling errors in their submissions sometimes judges ignore them — but not this judge, not this time. Adrian Prosser (the son) and Dawn Prosser (the wife) had both filed motions of joinder seeking to support Raynor in this matter, but the lawyers left out the "d" in the word, so Cannon stuck in a (sic) after every time the word "joiner" was used.
Cannon closed his 10-page order with a nine-part ruling, accepting the two Prossers' effort to join the Raynor motion, then denying everyone's attempts to keep Hogan & Hartson out of the case.
Meanwhile, another part of the multi-part Prosser litigation came to a close quietly in the federal court in Miami. Prosser, several years ago, had tried to use funds obtained from Innovative Telephone's preferred stockholders to buy the monopoly phone company in the former British colony of Belize. He failed to make a subsequent payment, lost control of the phone company and then sued the Central American nation's government, both in Belize and in the Miami U.S. District Court. He wanted $200 million in damages.
He lost in the Miami court and appealed to the U.S. Circuit Court of Appeals in Atlanta. That court noticed that a Belizean court's decision favorable to Prosser had been appealed to the Law Lords in London, the ultimate court of Belize, and that the Law Lords had not yet ruled on the case. The Atlanta judges told the Miami judge to suspend the case until the British court acted on it. It ruled against Prosser and, shortly thereafter, the Miami court did, too. (See "Prosser Loses Another Court Battle Overseas.")
The question was — would Prosser appeal the most recent Miami verdict, as he has done in so many other instances? The Source was told by a lawyer involved in the case that the deadline for appeal has now passed, and that Prosser had not sought one.
Meanwhile, the bankruptcy trial continues June 15 in the U.S. Bankruptcy Court in Pittsburgh.
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