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Prosser Still Fighting To Prevent Sale of Vitelco

A week after the fourth anniversary of ex-Vitelco owner Jeffrey Prosser’s bankruptcy, U.S. District Court on St. Croix witnessed a tsunami of motions and arguments Wednesday as Prosser and wife, Dawn, tried to prevent the sale of their former assets.
In May, the V.I. Public Services Commission voted to let one of Prosser’s biggest creditors, the National Rural Utilities Cooperative Finance Corporation (CFC), take ownership of Vitelco telephone and the Innovative cable television companies. Continuing a longstanding pattern of delaying tactics in this case, Prosser did not participate in the hearings, but objected afterwards. The PSC took no action on Prosser’s objection and by V.I. statute, his claim was deemed denied as of July 6.
With all regulatory approvals in place, all that is left is for the bankruptcy court to give final approval of the sale. Prosser’s attorneys are now fighting tooth and nail to stop that decision, throwing up any argument that might stick.
"The PSC order is stayed," said Prosser attorney Norman Abood. "There is no enforceable order of the PSC because it is stayed as a matter of Virgin Islands law."
"I believe that is a misinterpretation of Virgin Islands law," said James Lee, attorney for Prosser’s court-appointed Chapter 11 trustee.
"The petition for reconsideration was denied by operation of law yesterday because the PSC declined to take action on it," said CFC attorney Kent Bressie.
"I don’t believe there is an automatic stay provided in the law," said Assistant Attorney General George Phillips, legal counsel for the PSC. The statute proves a procedure to come before the PSC and object to a decision, and for a court appeal.
"The court would review the proceeding based on the standard of whether or not the decision was arbitrary, capricious or contrary to law," Phillips said. But "it is very difficult for a late petitioner who did not participate in the hearing before the decision to have standing in court," he said.
U.S. Bankruptcy Judge Judith Fitzgerald said there was a final PSC ruling and that the court did not need to wait for Prosser’s appeal to play out before approving the final sale of assets, but she made no ruling on the sale on Wednesday.
Also before the court were a slew of last-ditch efforts to slow or prevent the sale of other assets, including the multi-million dollar Palm Beach mansion where the Prossers have lived for free for the past two years, and a St. Croix condominium purchased in Dawn Prosser’s name with ICC money.
Back in May, Fitzgerald brushed aside a slew of legal challenges from Prosser and his wife, ordering 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.
In June, one of the court-appointed trustees asked the court to find Prosser in contempt for not cooperating with efforts to take photos, appraise and show the mansion. Fitzgerald ordered Prosser to cooperate and allow those preparations to happen within the next three weeks, saying she would revisit the question of sanctions for noncompliance if it did not happen.
As for the condominium on St. Croix’s north shore, Fitzgerald denied the challenges to its sale, but said proceeds would not be distributed until after court appeals were concluded.
Over the next few days, some issues, such as the status of the sale of Vitelco and the Innovative Cable companies, will be settled, while new issues will likely appear, and the multiyear battle will continue.

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