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HomeNewsArchivesLenders Ask Bankruptcy Court to Enforce $520 Million Judgment Against Prosser, ICC

Lenders Ask Bankruptcy Court to Enforce $520 Million Judgment Against Prosser, ICC

Dec. 2, 2006 — The Rural Telephone Finance Cooperative (RTFC) has asked a bankruptcy court, in RTFC's words, "to enforce judgments of $520 million against Jeffrey Prosser and two of his wholly-owned holding companies"– Emerging Communications, Inc. and Innovative Communication Co. LLC, — the latter being parent to Vitelco.
While it is well documented that RTFC, a Virginia-based not-for-profit lending cooperative for the rural telecommunications industry, has lent something on the order of $520 million to Prosser's organization and that Prosser has been sued for failing to meet the terms of his loan agreements, no one was available at RTFC at this writing to explain the nature of the "judgments" mentioned in the press release.
Prosser's ICC filed for bankruptcy July 31 after defaulting on loans from the cooperative.
Prosser also had lost a major court battle with the Greenlight companies in the Delaware courts; Greenlight represents the former minority stockholders in Emerging.
Greenlight and RTFC subsequently joined forces in an effort to force Prosser's operations into involuntary bankruptcy, and a series of suits and counter suits are still before the U.S. bankruptcy courts.
In a related issue, Greenlight on Dec. 1 asked a bankruptcy judge to undo the secrecy order regarding the bankruptcy proceedings (See " Prosser Creditor Now Arguing Against Secrecy in ICC Bankruptcy Proceedings").
It was in this setting that Steven L. Lilly, the cooperative's senior vice president and chief financial officer, in a press release Friday said: "RTFC is sensitive to the significant role that telecommunications plays in the U.S. Virgin Islands economy and the lives of its residents."
The collective made 18 loans to Innovative between 1987 and 2001, secured by "virtually all of ICC's assets," according to the court documents filed Friday asking the bankruptcy court to allow RTFC to collect on money owed.
Gov. Charles Turnbull called legislators into special session last week to discuss buying parts of Innovative. St. Thomas Administrator James O'Bryan said the move was to protect the company's 500 or more employees.
Senators declined to discuss a buyout, which would have included local and long distance lines, wireless and cable services, but not the Virgin Islands Daily News, TV2, and French and Dutch Caribbean businesses also owned by Prosser.
In court documents filed Nov. 22, Prosser states that the Senate would be considering a bill authorizing investigation of a government buyout. That is not what happened, however.
The bill considered during Tuesday's full Senate session would appropriate $300,000 from the General Fund to the Office of Management and Budget to pay for a feasibility study to determine whether the purchase would be in the "best interest of the territory."
In a letter sent Friday to Senate President Lorraine L. Berry, Gov. Charles W. Turnbull wrote that the bill allows the government to do its "due diligence" and "investigate" the merits of the acquisition.
Turnbull submitted the bill after holding two closed-door meetings to discuss the matter with his financial advisers and members of the government's financial team. The meetings were held in the Public Finance Authority building on St. Thomas
During Tuesday's meeting, however, senators loudly opposed the bill, and voted to hold it in the Committee of the Whole "until further notice."
The senators seemed taken aback when Sen. Louis P. Hill read the District Court documents on the floor.
"Jeffrey Prosserhereby declares under penalty of perjurythat it is my understating that a special session of the U.S. Virgin Islands Legislature is being called for Nov. 27, 2006," Hill read. "At the special legislative session, the legislature is expected to consider legislation: 1) authorizing the governor to conduct due diligence and investigate whether the acquisition is in the best interest of the Virgin Islands; 2) approving the acquisition; and 3) conferring upon Gov. Turnbull the requisite authority to execute on behalf of the government definitive documentation to affect the acquisition."
The documents go on to state that ICC has terminated one of its investors "which would have precludedICC from entering into negotiations with the government" or any other potential investor. Additionally, Prosser asks the court for more time to finalize negotiations with the government and "complete the acquisition."
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