Sept. 6, 2007 — The judge presiding over the Jeffrey Prosser bankruptcy case moved Thursday to make public nearly all the documents in the case, revealing among other things that Prosser companies have failed to pay some $10 million in workers' pensions.
Sitting in Pittsburgh, Penn., U.S. Bankruptcy Judge Judith K. Fitzgerald issued an order at the request of all parties but Prosser — owner of Vitelco, also known as Innovative Telephone –.that virtually all of the documents and transcripts filed previously would be made open to the public. The actual process of getting them released in full, she said, would take a little time, as the number of documents was large and there was a substantial amount of duplication.
A small number of documents were excluded from the order, and it was unclear why they were to remain secret.
At the beginning of two days of scheduled hearings, Fitzgerald urged the parties to come to a "global settlement" of all the issues involved. The judge gave the lawyers all morning to confer, and when no resolution was reached, the hearing began at 1 p.m. and continued until the telephone connection with the Virgin Islands went down at about 5 p.m.
In the meantime, a number of facts in the case came to light for the first time.
Prosser's debts and those of his companies are so large that he is "out of money," according to Toby Gerber, an attorney for the Rural Telephone Finance Cooperative, one of Prosser's main creditors. Even once his debts are settled, Prosser thus would have no money coming from the sale of his companies.
Gerber pointedly contrasted the liens laid on the Prosser companies by the federal government for non-payment into workers' pension funds — some $10 million — to the $120,000 a month salary that he routinely pays himself.
A lawyer from the federal government's Pension Benefit Guaranty Corporation was present to underline her agency's concerns about these unpaid benefits.
The court-appointed trustee of Vitelco, Stan Springel, estimated the company's gross income at $90 million a year. Springel spent most of the afternoon on the witness stand arguing his position, and that of the creditors, that he be put in charge of what the court calls "new ICC" — the holding corporation that manages and secures income from Vitelco and various other telecommunications operations run by Prosser. That entity is not part of Springel's current mandate.
He said a broader mandate is necessary since he is having trouble securing complete and up-to-date financial information from Prosser's operating companies. Prosser also might bid on some or all of the properties at a sale, Springel said, at the same time Prosser is managing the sale, resulting in a clear conflict of interest.
Springel said that he would be in the Virgin Islands next week for more talks with the Public Service Commission. He said his conversations in the past had been limited to talks with a PSC consultant, Gregory Mann.
The hearing will resume Friday morning. At one point in Thursday's proceedings, Prosser's lawyers tried to convince the judge to modify one of the proposed bankruptcy arrangements. Unmoved, Fitzgerald said that Prosser "had to get a sense of reality" about his financial prospects.
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