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Value of Prosser's Wine Now in Cellar

Jan. 4, 2008 — What happened to the collection of rare wine owned by Jeffrey Prosser, the former owner of Innovative Telephone?
Its value dropped from $3 million in early 2000 to only $100,000 as of November 17, 2007, according to recently filed court documents in Prosser?s bankruptcy case.
That question, and many others about Prosser?s finances and his financial reporting, arose when his lawyers sought to get him excused from personal bankruptcy. His principal creditor, the Rural Telephone Finance Cooperative, objected — at some length.
RTFC?s lawyers said that, generally "Prosser has disobeyed court orders and concealed or destroyed [financial] records." The document was filed with the U.S. Bankruptcy Court by Moore, Dodson & Russell, PC, a St. Thomas law firm, and by Fulbright & Jaworski, L.L.P., a Dallas, Texas firm, on Dec. 28.
The lawyers also charged, "Prosser, while an officer and director of New ICC, caused New ICC to ?use its funds to acquire personal property for the benefit of himself and one or more of the co-defendants…including but not limited to: jewelry, art, automobiles, personal watercraft, fine wines… None of these expenditures benefited [New ICC].?"
The RTFC attorneys criticized Prosser for "stonewalling" regarding his and his companies? finances, saying, "Prosser has also not explained the precipitous drop in the value of his wine collection (from approximately $3 million in early 2000 to approximately $100,000 as of his [court-ordered] examination on November 14, 2007)." The lawyers apparently were more worried about Prosser?s financial reporting techniques than they were about the possibility the wine had turned to vinegar.
"In fact," the brief continued, " Prosser directed the transfer of between $34 million and $156 million out of his operating companies [such as Vitelco] to his personal account or for his personal benefits with no intent to repay the corporate funds. Prosser directed New ICC to initially purchase his Palm Beach property. Moreover, Prosser paid for the Estate Shoys property out of funds from New ICC…."
In another development in the case, the lawyer for the court-appointed trustee for New ICC, Stan Springel, told the court at a recent hearing that the controversial executive jet once owned by a Prosser-controlled firm had been sold.
"We have sold the 727 Jet for close to $2 million net to this estate" reported Daniel Stewart, one of Springel,?s lawyers.
Who bought it, the exact price, and the date of sale were not disclosed.
Prosser lost control of his plane — but not his ability to charge expenses to his companies, according to another report from Springel: "With access to 727 denied, Prosser charters Cessna Citation at cost of over $130,000 charged to New ICC and Vitelco for Labor Day weekend trip to Lake Placid [in New York, site of one of Prosser?s residences]."
Another hearing in the case was scheduled for Jan. 3 in Pittsburgh, again before U.S. Bankruptcy Judge Judith K. Fitzgerald.

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