Sept. 10, 2008 — The drum roll of negative rulings for Jeffrey Prosser and his family continues in the bankruptcy case of the former owner and CEO of Innovative Telephone.
Over the last several weeks, two federal judges have issued five separate rulings, all of which ran counter to Prosser positions. The more prolific of the two judges recently has been St. Thomas Federal District Court Judge Curtis Gómez, who handles appeals from the U.S. Bankruptcy Court, which has initial jurisdiction of the Prosser bankruptcy cases. Four of the decisions were his.
In one, Gómez ruled that Prosser's wife, Dawn, could not have the jury trial that she wanted to decide who owns some valuable property. At issue was the question of whether she, a non-debtor, owns the property, or whether it was owned by Prosser or one of his former corporations.
In this instance, the judge said he did not need to consider the merits of the matter because Dawn Prosser's lawyers had failed to meet the appeals deadlines set for such cases. Had she won, the jury trial would have been in U.S. District Court, as juries are not used in bankruptcy courts Attorneys for the creditors said the use of a jury was inappropriate and would further delay proceedings.
In the other three rulings, the federal judge ruled contrary to the Prosser position in saying the decisions to be made were to stay in the bankruptcy court and not move to federal district court. In two of these three rulings, it appears the same text was used but with different case numbers.
Attorneys for the creditors and the court-appointed trustees have repeatedly argued that Prosser has sought to use a wide variety of legal maneuvers, such as seeking a jury trial, in efforts to slow the process and thus delay the ultimate reckoning in the case.
Meanwhile, Bankruptcy Judge Judith Fitzgerald ruled that a longtime Prosser ally, John P. Raynor, could not participate in the case. Raynor had sought to do so as an interested party. He was a board member of Prosser's corporations.
Like two other lawyers in this case before him, Raynor sought to present pro-Prosser arguments without having what the judge regarded as a client in the case. Both of the other lawyers were also thrown out of the proceedings. The lawyers for the trustees and the creditors argued that Raynor's presence would add nothing to the case, but would seriously delay an already two-and-a-half-year-old dispute.
Sometimes a judge simply says yes or no to a motion filed by a lawyer; sometimes the judge adds the judicial equivalent of an exclamation point, as Fitzgerald did in this case.
In addition to ruling that Raynor had "no standing to file a response," and saying that Raynor's most recent document had been "improvidently filed," she ordered the clerk of the court to remove all references to it from the electronic docket, but to keep a paper copy for the record.
The judge also did a little editing, writing in her order: "John P. Raynor having filed 'Resistance to Fulbright Jawaroski [sic] Virulent Character Assasination [sic] ….'"
Fulbright Jaworski is a major Texas law firm retained by Prosser's largest creditor, the Rural Telephone Finance Cooperative. One of the firm's partners was the late Leon Jaworski, a special prosecutor in the early-1970s investigation of the Watergate scandal involving U.S. President Richard Nixon.
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