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HomeNewsArchivesVitelco Seeks to Transfer Latest RTFC Case to the V.I.

Vitelco Seeks to Transfer Latest RTFC Case to the V.I.

May 23, 2005 – Jeffrey Prosser's lawyers got an "I will take it under advisement" reaction Friday when they sought to move the latest lawsuit against Vitelco by the Rural Telephone Finance Cooperative to the U.S. Virgin Islands.
RTFC, which has offices in northern Virginia near Washington, D.C., had filed a civil action in the U.S. District Court for the Eastern District of Virginia against Vitelco calling for the repayment of a $4 million loan. (See "RTFC Says ICC Failed to Pay Bank $14 Million", an article dealing with both the $4 million loan to Vitelco and a $10 million loan to its parent company, Innovative Communication Corp.) RTFC said the loan was due and payable March 20, and that Vitelco was in default for not paying it in full.
Vitelco' s Virginia-based attorney, Craig Reilly, argued that it would make more sense to move the case to the federal courts in the Virgin Islands, where three other RTFC v. ICC cases are pending. He said the parties were the same, the issues were similar, and it would serve the cause of "judicial efficiency" to transfer the latest case to the territory to join the other three.
In one of these three lawsuits, RTFC, a non-profit specialized bank that raises money for rural utilities, sought repayment of the full $530 million-plus that it says ICC owes RTFC.
Reilly argued that the various suits had been brought against his client "by an overly aggressive lender" and said an RTFC attorney had said the bank "was sick and tired of working with ICC" during a meeting of the V.I. Public Service Commission.
RTFC' s New York-based attorney, Jonathan Siegfried, opposed the motion to transfer the dispute, saying the $4 million case was much less complicated than the $530 million one, that it could be solved in the summary judgment phase and thus could be closed more quickly than the other three cases.
He also said there is no judge available to handle the cases in the District Court in the Virgin Islands. Siegfried explained that while the cases had been initially assigned to then U.S. District Judge Thomas K. Moore of the U.S. District Court in the territory, but he "unfortunately was not reappointed." Siegfried said Prosser had pushed for the appointment of District Judge Curtis Gomez in his place. (See "Judging Tom: Politics Bares its Teeth").
RTFC had asked Gomez to recuse himself from the cases, Siegfried said, because of the circumstances of his appointment and because the judge' s wife had once worked on the matter for RTFC. Gomez, Siegfried said, has not ruled on the recusal request and has not scheduled any hearings on the case until September.
The judge in the Virginia court, James C. Cacheris, did not comment on Siegfried' s description of the appointment process, but he did interrupt the RTFC lawyer when he said the federal judges in the
Virgin Islands had 10-year-terms. "I think they are eight-year terms, but go ahead," Cacheris said.
When Moore was mentioned by name, Cacheris said: "I know him. He used to be an assistant U.S. attorney here."
The judge ended the hearing by saying he would take the matter under advisement. He did not specify when he would decide.
Meanwhile, stalemates blocked two other matters of interest to ICC.
The press in Belize has been reporting in recent days on a standoff in the battle for control of what had once been the highly profitable Belize Telecommunications Ltd. A board of directors meeting, ordered by a U.S. district judge in Miami, was deadlocked four-to-four according to the Belize media, with four directors siding with Prosser and four others voting the other way. (These included one government representative and three working for Lord Ashcroft, the former owner of BTL.)
The BTL staff, in the meantime, is running the company with no input from the split board.
The Belizean stalemate has also brought the proceedings between ICC and a group of ICC' s former minority stockholders to another deadlock.
Last year a Delaware judge made a ruling, but not yet a judgment, in
favor of the minority stockholders, and subsequently the parties came to a tentative agreement. (See "ICC Agrees to Pay More than $85 Million in Stockholder Suit").
A letter from the attorney for the minority group, Thomas J. Allingham II, to Judge Jack B. Jacobs recently surfaced, indicating that the Belize standoff had become an obstacle to the proposed settlement. Dated March 2, the letter read: "A portion of the settlement consideration is to be secured by a stream of payments to certain defendants [i.e., ICC] under leaseback arrangements with the Belize telephone company. We have been informed that the government of
Belize has now sought to assert control over [BTL], potentially jeopardizing that security."
Both the situation in Belize and the minority stockholder case were mentioned by Reilly during Friday' s hearing.

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