How has Jeffrey Prosser, the long-bankrupt former owner and CEO of Innovative Telephone, been able to keep four lawyers working on his case? What is the source of the presumed funding of the lawyers’ work?
Presiding U.S. Bankruptcy Judge Judith Fitzgerald issued an order on May 24 designed to answer those questions. Stan Springel, the court-appointed trustee who has been trying to close out the bankruptcy case, and who has faced dozens of Prosser legal moves to block his actions, asked the court to issue such an order.
The order was a long time coming. For years there has been speculation in and out of the courtroom that there must be some undisclosed source of funds to pay the lawyers, who are located in Toledo, New York City, St. Croix and Omaha. Whenever there is a hearing, usually in Pittsburgh or sometimes on St. Thomas, one or more of Prosser’s lawyers are in attendance, and the others are listening to the proceedings over the courtroom telephone system. And all four of them have been generating a massive flow of legal documents for years.
One of the four lawyers, Robert F. Craig, was not included in the order. Included were Norman A. Abood of Toledo, Lawrence H. Schoenbach of New York, and Jeffrey Moorhead of St. Croix.
The three were told that they “shall state, with particularity … the amount of each payment for compensation or expenses of counsel that has been received to date, the dates each of those payments were received, the source(s) of funds for each of those payments, any payments promised or agreed to, but not yet received, and the anticipated source(s) of any future payments … including the bank account or other sources from which payment was made ….”
These reports, according to the order, are due on May 29.
If the past is any guide, the Prosser forces will appeal the judge’s order to the federal district court in St. Thomas. There have been numerous such appeals, often futile, from Fitzgerald’s earlier decisions.
In other developments in the case, Prosser’s lawyers, on May 23, filed another paper with the judge asking her to refer to the U.S. Attorney their charges that Prosser’s former valet had committed perjury in his earlier testimony about Prosser’s effort to destroy financial data.
In other Prosser news, the real estate agent selected to bring about the sale of the Prosser mansion in Florida, argued in yet another document filed with the court that he deserved his fee of 4 percent (or 5 percent if shared with another agent) on the grounds that the Prossers are "hostile occupants." The realtor writes, "In most cases, a realtor is engaged by the current owners and occupiers of a property, who are motivated to cooperate in the sales process. Here the occupants are not the seller, and have made clear in papers and arguments to the Court that they will put up every obstacle and roadblock that they possibly can to interfere with the sale. The occupants have not serviced the mortgage on the property, paid taxes or paid to insure the property in two years … At the very least, I expect there to be a complete lack of cooperation when it comes to routine, simple matters, like showing the property….”
Although the mansion’s ownership is in dispute, the property is to be shown now, and the court will later determine the ownership issue.
