Jeffrey Prosser, formerly the owner of Vitelco and the two Innovative cable TV companies, has been in bankruptcy since 2006. In 2007, the couple was ordered to preserve a multimillion-dollar wine collection at the Prossers' homes in St. Croix and Palm Beach, Fla., pending a final resolution of the bankruptcy proceedings.
A court appointed trustee arranged for an inventory of the wines in 2008 and found the Prossers' wine safely stored inside a temperature controlled wine cellar on St. Croix. But upon coming back to check on the wines in 2010, the trustee's agents people found they had been taken out of their neatly sorted storage space and stacked haphazardly in a hot storage room. Representatives of Christie's auction house appraised the wines, previously valued at more than $300,000 and declared all of it "unsalable and thus valueless."
Additionally, much of the wine was missing from both cellars.
Trustee James Carroll filed a motion for civil sanctions against both Prossers in August of 2011. The Prossers countered by denying the validity of the inventory and alleging a conspiracy, whereby the court appointed trustees did not want to sell the wine, but preferred it ruined, to embarrass the Prossers, they said.
In a Sept. 18 memorandum opinion, U.S. Bankruptcy Judge Judith Fitzgerald rejected the objection to the 2008 inventory as "specious."
"The Prossers were in sole possession and control of the Palm Beach Property, the Shoys Estate and all of the wines in question. Thus, they had every opportunity to count and re-count every bottle and case of wine, or to challenge the ... inventories," Fitzgerald wrote.
Fitzgerald also noted Prosser "personally purchased each bottle and case of wine. If anyone had personal knowledge of the number of wines and their value, it was (Jeffrey Prosser)."
Yet despite personal knowledge and ample opportunity to question the 2008 inventory, neither Prosser made any objection until years later, in 2011, when the wine turned up missing.
Fitzgerald found the Prossers knew the court had given them orders to preserve the wine and "flagrantly disobeyed them" by allowing about half the wine in both properties to disappear and failing to make reasonable efforts to protect the expensive wines in temperature controlled storage.
At the Prossers' former Estate Shoys residence on St. Croix, 453 bottles worth $139,412 were missing in December of 2011, according to the court – for an average estimated auction price of $308 per bottle.
The price on a restaurant wine list would be at least double the auction price, while retail prices would likely be somewhere closer to the auction price.
An additional 527 bottles worth $211,884 were considered unmarketable, bringing the amount of damages from the Shoys Estate to $351,296.
Another 471 bottles of wine, with a value of $83,579, were missing from Palm Beach in March of 2011, according to the court. That comes to an average of $177 per bottle, at auction price.
The court awarded Jeffrey Prosser's Chapter 7 Estate (which represents his personal creditors as opposed to his corporate creditors) sanctions against both Jeffrey and Dawn Prosser in the amount of $434,875, minus whatever the remaining wines fetch at auction.
It also imposed sanctions "an as yet undetermined amount in fees and costs" for the court appointed trustee's expenses for experts and legal counsel.
Additional fines for damages will be assessed in a supplemental order, according to the court.