Despite a court order awarding half the property to bankrupt businessman Jeffrey Prosser’s personal creditors, his wife, Dawn Prosser, sent those holding the property a letter claiming the court had awarded it all to her, prompting a court trustee to ask for sanctions.
Jeffrey Prosser, former owner of Vitelco, has been in protracted bankruptcy proceedings since 2006. His former companies have been sold, along with much of his personal property, and now the Prossers and their creditors are fighting over millions of dollars in jewelry, art, antiques and cash Jeffrey Prosser gave to his wife before and after entering bankruptcy.
After a joint trial in June 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. Judge Juan Sanchez later issued an order encapsulating the jury verdict in favor of Carroll. Appeals and motions are still pending.
On Aug. 16, Dawn Prosser wrote a letter to the various art, jewelry and antique dealers who are holding onto the property pending the court’s final orders, declaring the "Judgment Order finds that the certain property in your possession is my property." She cites the Sanchez order in the case she won, but does not mention the case she lost.
"I have attached a summary sheet which has two columns, as highlighted, totaling $31,883,675.01 representing the property awarded to me in the Judgment Order," wrote Dawn Prosser. "The property in your possession is included in the judgment order."
The verdict that she cites only says "certain transfers" were not fraudulent, and it does not itemize what those transfers were, provide a dollar figure or make any conclusion about ownership of the property.
Carroll filed a motion asking for sanctions and monetary penalties against both the Prossers for violating the court’s orders and attempting to induce third parties to turn over property being held by the court. His filing combines this new concern with a previous request for sanctions for "dissipating" hundreds of bottles of wine valued at over $1 million and causing another $300,000 worth of wine to spoil by moving it out of temperature-controlled storage.
Carroll also asked for an expedited hearing on the contempt and sanctions motion, which U.S. Bankruptcy Court Judge Judith Fitzgerald granted. This motion and the Prosser’s response will be addressed along with numerous other issues at an omnibus hearing in Pittsburgh, Pa., Aug. 30.
