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Wednesday, October 5, 2022
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Bankruptcy Trustee Wants Prosser Held in Contempt

One of the court-appointed trustees in the Prosser bankruptcy case, James P. Carroll, has asked the court to find Jeffrey Prosser, former owner and CEO of Innovative Telephone, in contempt for his lack of cooperation in the prospective sale of his mansion in Palm Beach, Fla.
Brushing aside various legal challenges, U.S. Bankruptcy Judge Judith Fitzgerald last month ordered that the mansion be put on the market, and, in a subsequent decision, approved the trustee’s selection of a real estate agency to handle the sale.
According to Carroll’s motion the judge “ … expressly directed the Prossers to cooperate with the trustee in his efforts to market the … property.”
Later in the motion, Carroll’s lawyers said: “The Prossers expressly refused to grant the Chapter 7 Trustee [Carroll] or his sales agent access to the Palm Beach Property.”
Carroll asked the court to direct the Prossers to cooperate in the sale, to establish procedures for the sale of the mansion, and to hold Prosser in contempt for past lack of cooperation.
The brief said: “Despite living in the Palm Beach property, the Prossers have not paid the … carrying costs, nor any other similar costs for at least two years.”
The reference to “carrying costs” relates to insurance, property taxes and mortgage payments. In the case of the mansion, they are substantial according to the brief, collectively running at the rate of about $1,500 a day, moneys that Carroll argues should be used to pay Prosser’s creditors, not to house him and his family.
In other prosser news, the last of Prosser’s four lawyers to reply to a court demand that they reveal their financial arrangements with Prosser did so on June 9—about a week after the deadline set for such accountings. Jeffrey Moorhead of St. Croix stated that he had not represented Prosser in the bankruptcy hearings, per se, that he had not received any money from Prosser since the start of the bankruptcy hearings in 2006, but that he had represented Prosser in two other suits: one against his former valet, Arthur Stelzer who had testified about Prosser’s alleged destruction of financial records; and another against David M. Nissman, the former U.S. Attorney in the U.S. Virgin Islands.
Moorhead said that he had not been paid for work on these “personal injury cases” and that no “promises have been made or received by me as to payment compensation from debtor Jeffrey J. Prosser in connection with this or any other case.”
What Moorhead did not discuss was as interesting as what he did report. He reported nothing on his financial relations, if any, with Prosser’s wife, Dawn. Nor did he, as some of the other lawyers did, report the receipt of funds from Dawn Prosser or other members of the family.
As noted in an earlier article “Questions Regarding Unpaid Lawyers Still Remain,” the judge only asked about payments made to the lawyers, not their motivation for providing extended legal services to a bankrupt person without apparent compensation.
The mystery continues.

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