The Prossers’ efforts to overturn a jury’s verdict that former Vitelco owner and CEO Jeffrey Prosser fraudulently transferred a fortune to his wife, Dawn Prosser, to hide money from his creditors came to naught last week with a sweeping judgment upholding the verdict.
Coming on the heels of their eviction from their mansion in Palm Beach, Fla., which was approved by a bevy of other judges, it has not been a good summer for the Prossers.
The decision on the transfers was made by a visiting federal district court judge from Pennsylvania, Juan Sánchez, who has had relatively little to do with the drawn-out Prosser bankruptcy in the past.
After a joint trial with two juries over two suits from court-appointed trustees for Prosser’s personal and corporate bankruptcy estates, one jury decided Prosser himself fraudulently hid millions from his creditors by giving it to his wife. They awarded Prosser’s personal creditors, represented by Chapter 7 Trustee James Carroll, $14.9 million in cash and millions more in jewelry and art.
The other jury, looking at different assets, under different jury instructions, concluded Dawn Prosser benefited from "certain transfers" of money from ICC (Prosser’s former company), but ICC as a company did not make the transfers "with actual intent to hinder, delay or defraud," creditors, and so Dawn Prosser did not have to return any money to ICC’s creditors through its Chapter 11 Trustee Stan Springel.
Immediately after the two verdicts, Dawn Prosser’s attorney Jeffrey Moorhead issued a press release announcing "a unanimous St. Thomas jury determined that the over $31 million in assets transferred by the ICC Companies to Dawn Prosser were transferred for fair value," and declaring the Prossers exonerated of all wrongdoing. At the same time, Moorhead also filed a motion to have the judge overturn the damaging jury verdict. That motion died with Sanchez’s order of last week.
The winner in the case was court-appointed Chapter 7 trustee James Carroll, who handles the personal part of the debtor’s estate (with Stan Springel being his opposite number regarding Prosser’s one-time corporate interests). To the extent that funds can be extracted from the Prossers, they will go to Prosser’s debtors, primarily the Rural Telephone Finance Corporation, a nonprofit bank in Virginia.
The judge did not rule that a single item be awarded to Dawn Prosser.
In addition to two tranches of cash (which the judge set at $2.4 million and $500,000, respectively), furniture worth more than $700,000, and two sets of improvements on the “Shoys Estate” valued at more than $8.3 million and more than $2.9 million, respectively, the judge also ordered seven lots of jewelry and eight art works and valuable furniture turned over to Carroll.
Sanchez did not set a value on these last two groupings, but estimates are given in other court documents. They include:
— a Chopard 18k white gold, ruby and diamond earrings valued at roughly $200,000;
— a Chopard 18k white gold, ruby and diamond necklace valued at $229,000;
— a Chopard 18k white gold, ruby and diamond bracelet valued at $424,000;
— a Chopard pendant and chain and a variety of other pieces of Chopard jewelry
– a Kaufmann de Suisse platinum ring set; and
– some jewelry from Tiffany & Co. Schlumberger.
The jury also awarded the trustee a fortune in art:
— "Woman Carrying a Jug" painting by Camille Pissarro;
— "Water Carriers on High Road" painting by Camille Pissaro;
— "Une Crique a Saint Thomas, Antilles" painting by Camille Pissaro;
— "Paysage de la Martinique" painting by Charles Laval;
— "A Tropical Landscape" painting by Norton Bush; and
— several other etchings, prints and two nice pool tables, one considered an antique.
Art varies widely in price, but a single Pissaro painting purchased by Jeffrey Prosser, not among those listed here, was sold at auction in 2008 for $4.1 million earlier in his protracted bankruptcy.
If the past is any indication, the Prossers will appeal the decision but the U.S. Court of Appeals in Atlanta, which would hear the case, has not been very helpful to the Prossers in earlier decisions.
Meanwhile, in a related development, Carroll has filed a suit against the Prossers for mishandling the fine wine collection whose ownership is in dispute. The Prossers, according to Carroll, had stored the wine in a non-air-conditioned location, which threatens the value of the collection.
The next monthly gathering of the bankruptcy lawyers will take place on Aug. 30 in the courtroom of the presiding U.S. Bankruptcy Judge, Judith Fitzgerald, in Pittsburgh. These gatherings include status conferences on various aspects of the litigation and some decision-making by the judge.
