Dawn Prosser, wife of bankrupt former Vitelco owner Jeffrey Prosser, is asking a judge to overturn a St. Thomas jury’s verdict saying she must return tens of millions of dollars fraudulently transferred to her to hide money from her husband’s creditors.
After a joint trial with two juries over two suits from court-appointed trustees for Prosser’s personal and corporate bankruptcy estates, one jury decided Prosser himself fraudulently hid millions from his creditors by giving it to his wife. They awarded Prosser’s personal creditors, represented by Chapter 7 Trustee James Carroll, $14.9 million in cash and millions more in jewelry and art.
The other jury, looking at different assets, under different jury instructions, concluded Dawn Prosser benefited from "certain transfers" of money from ICC (Prosser’s former company), but ICC as a company did not make the transfers "with actual intent to hinder, delay or defraud," creditors, and so Dawn Prosser did not have to return any money to ICC’s creditors through its Chapter 11 Trustee Stan Springel.
Immediately after the two verdicts, Dawn Prosser’s attorney Jeffrey Moorhead issued a press release announcing "a unanimous St. Thomas jury determined that the over $31 million in assets transferred by the ICC Companies to Dawn Prosser were transferred for fair value," and declaring the Prossers exonerated of all wrongdoing.
The jury verdict makes no mention of $31 million or fair value.
On June 15, Moorhead filed a motion on Dawn Prosser’s behalf asking U.S. District Court Judge Juan Sanchez to override the jury that ruled against her and enter a different judgment "as a matter of law," citing Rule 50 of the Federal Rules of Civil Procedure.
Dawn Prosser’s attorney argued Sanchez should overturn the jury because the trustee for Prosser’s personal estate allegedly failed to prove Prosser’s ownership of the assets he transferred to his wife, and his insolvency at the time of each transfer; Moorhead also argued the second jury verdict regarding ICC transfers negates the jury verdict regarding transfers from Prosser.
Carroll’s attorneys filed a response June 29, disputing each of Dawn Prosser’s factual and legal assertions. They also claimed the allegations would not meet the legal threshold for overturning a jury verdict even if they were accurate "because Dawn Prosser did not raise the issues she now
raises in her motion for judgment as a matter of law before the case was submitted to
the jury, as required by Rule 50 … ."
The relevant part of Rule 50 reads: "A motion for judgment as a matter of law may be made at any time before the case is submitted to the jury. The motion must specify the judgment sought and the law and facts that entitled the movant to the judgment."
In the trial, Moorhead raised a rule 50 request for judgment as a matter of law, but on a different legal issue. Prosser’s attorney argued that the case should be dismissed because Prosser’s intent to commit fraud had not been proven. Attorneys for the two trustees argued long-established case law established several "badges" of fraudulent transfer and that proving psychological intent is not necessary.
That issue was not raised in Dawn Prosser’s post-verdict motion to overturn the jury, and the ones she did raise were never mentioned before the trial went to jury, so the motion should fail, according to Carroll’s attorneys.
Regardless, Prosser’s claim that he was solvent at the time of the transfers should be rejected, Carroll’s attorneys say, because the motion only speaks to ICC’s solvency, while the verdict relates to Prosser’s personal bankruptcy.
"There was never any argument asserted that Mr. Prosser, himself, was not insolvent," and showing insolvency is not required anyway when arguing actual fraud, Carroll’s attorneys wrote.
Sanchez has yet to rule on the two post-verdict motions. Roughly $17.4 million is at stake, although sources familiar with the case say much of the money may be long-spent and unrecoverable. Along with a $14.9 million cash award, the jury awarded Carroll a fortune in jewelry and art given to her by her husband, including:
— Chopard 18k white gold, ruby and diamond earrings valued at roughly $200,000;
— a Chopard 18k white gold, ruby and diamond necklace valued at $229,000;
— a Chopard 18k white gold, ruby and diamond bracelet valued at $424,000;
— a Chopard pendant and chain and a variety of other pieces of Chopard jewelry
— a Kaufmann de Suisse platinum ring set; and
– some jewelry from Tiffany & Co. Schlumberger.
The jury also awarded the trustee a fortune in art:
— "Woman Carrying a Jug" painting by Camille Pissarro;
— "Water Carriers on High Road" painting by Camille Pissaro;
— "Une Crique a Saint Thomas, Antilles" painting by Camille Pissaro;
— "Paysage de la Martinique" painting by Charles Laval;
— "A Tropical Landscape" painting by Norton Bush; and
— several other etchings, prints and two nice pool tables.
Art varies widely in price, but a single Pissaro painting purchased by Jeffrey Prosser, not among those listed here, was sold at auction in 2008 for $4.1 million earlier in his protracted bankruptcy.
Also at stake are a $30,000 antique dinner table and two antique Venetian chandeliers valued at $150,000.
