Although a U.S. Bankruptcy Court authorized the immediate sale of Vitelco and the Innovative cable companies Tuesday afternoon, V.I. Superior Court Judge Harold Willocks, apparently moments later, ordered an emergency stay on the V.I. Public Services Commission’s approval of the transfer in early May.
U.S. Bankruptcy Judge Judith Fitzgerald issued three orders Tuesday: one authorizing the immediate sale of the properties, a second dismissing Prosser’s attempts to delay (stay) that sale; and a third regarding legal fees.
For more on Fitzgerald’s order, see, Bankruptcy Judge Rules Against Prosser; Approves Vitelco Sale.
All the companies used to be the property of bankrupt mogul Jeffrey Prosser, who declared bankruptcy in 2006. He is in involuntary Chapter 7 bankruptcy; and ICC, the parent company of Vitelco, which he used to own, is in Chapter 11.
In May, the PSC voted to let Prosser’s biggest creditors, the National Rural Utilities Cooperative Finance Corporation (CFC), take ownership of Vitelco and Innovative. Although Prosser objected to the PSC’s May ruling, the PSC took no action on Prosser’s objection and, by V.I. statute, his claim was deemed denied on July 6.
On July 7, Prosser, his wife Dawn Prosser, and Jeffrey Moorhead, a St. Croix attorney currently running for Congress and a former PSC hearing examiner overseeing Vitelco, jointly filed an appeal of the PSC decision in V.I. Superior Court.
Fitzgerald’s aforementioned ruling, dismissing Prosser’s objections and authorizing the Vitelco sale, was entered into the court’s online record system at 3:44 p.m. Tuesday.
Willocks apparently issued his order some time after that, but the order has only a date and no time stamp.
Willocks set a Sept. 17 status hearing for the appeal.
Nothing in the order explains why Willocks issued a stay a month and a half after the filing of Prosser’s appeal, or whether his stay was in response to Fitzgerald’s Tuesday order.
Placing the stay after the federal court has already ruled could create extensive delays to the bankruptcy proceedings.
The territorial court will not discuss the case for another month, and Willocks could possibly delay the proceedings again at that point.
The federal court will have to respond in some fashion to what the territorial court does, revisiting its own actions and either affirming or modifying them, effectively duplicating its past efforts.
The PSC discussed the new developments at its regular meeting Tuesday evening.
"There appear to be several issues here; the first of which is timing, as in which [judge’s] order happened first, since one came federal and one local," said PSC Chairman Joseph Boschulte.
More delay in the process may not be in the best interest of V.I. ratepayers, he said.
"My biggest concern is that until this is all finally cleared up the money will not be fully invested the way that it should be into Vitelco," he said.
It is not immediately apparent what happens now.
Stay tuned to the Source for further developments.
