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Three Federal Judges — Two New to the Case — Say No to Prosser

Jeffrey Prosser, former owner and CEO of Innovative Telephone, has suffered three more previously unreported setbacks in the federal courts – two from judges new to the case.

One of the new judges is Sue L. Robinson, a federal district court judge in Delaware. The creditors in the Prosser proceedings – primarily the Rural Telephone Financial Cooperative, which lent Prosser’s firms more than half a billion dollars – filed a breach-of-contract suit against Prosser in her jurisdiction.

The creditors subsequently sought to have the suit transferred to the U.S. Bankruptcy Court judge, Judith Fitzgerald, who has been hearing other elements of this drawn-out controversy for years. Prosser objected. Fitzgerald, though routinely in Pittsburgh, also sits from time to time in the Delaware branch of the bankruptcy court, a federal institution.

On Aug. 7, Robinson ruled that it made sense to bring the breach-of-contract case before a judge who was already familiar with what she termed the "convoluted" nature of the overall proceedings.

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Earlier in the year, a federal district judge in Washington, D.C., James Robertson, rejected an effort by Prosser and his longtime colleague, John Raynor, to sue the U.S. Department of Agriculture and the Federal Agricultural Mortgage Corporation (Farmer Mac). Robertson ruled in January that Prosser and Raynor had no standing (i.e., no right to sue) with the department or Farmer Mac.

Prosser and Raynor argued that the two agencies provided unlawful support to RTFC’s parent company, the National Rural Utilities Cooperative Finance Corporation, which in turn, conspired against Prosser’s interests.

In turning down Prosser’s arguments, Robertson said "… although the complaint is long on conspiracy theories and painstaking (if unilluminating) detail, it is fatally short of allegations of fact that would establish … standing."

Meanwhile, back in the Virgin Islands, there was another decision from a different federal district court judge, one thoroughly accustomed to the Prosser v. creditors battles. He is Judge Curtis Gómez, chief judge of the St. Thomas federal court, who has the task — among others — of hearing appeals from the bankruptcy court.

On Aug. 19, Gómez ruled against Prosser on a two-year-old motion. Prosser had sought to have nullified Fitzgerald’s appointment of Stan Springel as the Title 11 trustee in the case. Had Gómez upheld the appeal, it would have complicated, if not thwarted, the work of the last two years in which many of Prosser’s properties, including all of the corporate ones, have been sold to meet some of Prosser’s personal and corporate debts.

Robinson and Robertson now join the seemingly ever-expanding ranks of judges who have ruled in recent years against Prosser on various matters. The group now includes federal judges in Alexandria, Va.; Atlanta, Ga.; Miami, Fla.; Pittsburgh, Penn.; the U.S. Virgin Islands; Washington, D.C.; and Wilmington, Del. Ruling have also come from several state judges in Delaware and overseas judges in Great Britain and Belize (the former British Honduras).

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Jeffrey Prosser, former owner and CEO of Innovative Telephone, has suffered three more previously unreported setbacks in the federal courts – two from judges new to the case.

One of the new judges is Sue L. Robinson, a federal district court judge in Delaware. The creditors in the Prosser proceedings – primarily the Rural Telephone Financial Cooperative, which lent Prosser's firms more than half a billion dollars – filed a breach-of-contract suit against Prosser in her jurisdiction.

The creditors subsequently sought to have the suit transferred to the U.S. Bankruptcy Court judge, Judith Fitzgerald, who has been hearing other elements of this drawn-out controversy for years. Prosser objected. Fitzgerald, though routinely in Pittsburgh, also sits from time to time in the Delaware branch of the bankruptcy court, a federal institution.

On Aug. 7, Robinson ruled that it made sense to bring the breach-of-contract case before a judge who was already familiar with what she termed the "convoluted" nature of the overall proceedings.

Earlier in the year, a federal district judge in Washington, D.C., James Robertson, rejected an effort by Prosser and his longtime colleague, John Raynor, to sue the U.S. Department of Agriculture and the Federal Agricultural Mortgage Corporation (Farmer Mac). Robertson ruled in January that Prosser and Raynor had no standing (i.e., no right to sue) with the department or Farmer Mac.

Prosser and Raynor argued that the two agencies provided unlawful support to RTFC's parent company, the National Rural Utilities Cooperative Finance Corporation, which in turn, conspired against Prosser's interests.

In turning down Prosser's arguments, Robertson said "... although the complaint is long on conspiracy theories and painstaking (if unilluminating) detail, it is fatally short of allegations of fact that would establish ... standing."

Meanwhile, back in the Virgin Islands, there was another decision from a different federal district court judge, one thoroughly accustomed to the Prosser v. creditors battles. He is Judge Curtis Gómez, chief judge of the St. Thomas federal court, who has the task -- among others -- of hearing appeals from the bankruptcy court.

On Aug. 19, Gómez ruled against Prosser on a two-year-old motion. Prosser had sought to have nullified Fitzgerald's appointment of Stan Springel as the Title 11 trustee in the case. Had Gómez upheld the appeal, it would have complicated, if not thwarted, the work of the last two years in which many of Prosser's properties, including all of the corporate ones, have been sold to meet some of Prosser's personal and corporate debts.

Robinson and Robertson now join the seemingly ever-expanding ranks of judges who have ruled in recent years against Prosser on various matters. The group now includes federal judges in Alexandria, Va.; Atlanta, Ga.; Miami, Fla.; Pittsburgh, Penn.; the U.S. Virgin Islands; Washington, D.C.; and Wilmington, Del. Ruling have also come from several state judges in Delaware and overseas judges in Great Britain and Belize (the former British Honduras).