Sept. 25, 2005 — Jeffrey Prosser's bankers filed legal actions against his interests in Philadelphia and in Alexandria, Va., in recent weeks, while the U.S. Government filed a brief against one of his positions in Atlanta.
Meanwhile, in a fourth courtroom, in Wilmington, Del., part of another controversy was settled, apparently along lines acceptable to yet another of Prosser's adversaries.
Further, in an arena where Prosser is the aggressor, there was some forward movement as Prosser's battle with the Government of Belize (GOB) moves into an arbitration process in an international tribunal in Toronto, Canada.
Innovative Communication Corp., privately held by Prosser, is the parent to Innovative Telephone Company (the former Vitelco) and as such is one of the Virgin Islands‛ largest private-sector employers.
The Philadelphia action was a petition filed by the nonprofit bank, the Virginia-based Rural Telephone Finance Cooperative that has lent Prosser's ICC more than half a billion dollars. The petition related to RTFC's suit to force ICC to repay the half billion plus that has been languishing for months in the U.S. District Court in the Virgin Islands.
RTFC filed for a writ of mandamus with the Third U.S. Circuit Court of Appeals, calling for the Federal Judge sitting on the case in the islands, Curtis Gomez, to decide on recusing himself from the case. RTFC asked for the recusal for two reasons — published reports that Holland Redfield, who is both an ICC vice president and a member of the Republican National Committee, had been instrumental in getting Gomez appointed to the federal bench, and because Judge Gomez‛ wife had once done work for RTFC.
The RTFC v. ICC suit had previously been scheduled for a hearing on Sept. 23; when Gomez, without acting on the recusal request, postponed that hearing until Dec. 1, RTFC filed the writ with the Third Circuit, according to Jonathan Siegfried, the bank's attorney.
In general terms, according to a mainland attorney not involved in any of these cases, going over a judge's head in an effort to force recusal is an unusual procedure, as it might tend to cause the judge to dislike the side doing it. It is not known when action will be taken on that petition.
On Aug. 30, RTFC filed a civil action in the U.S. District Court in Alexandria asking that ICC repay $10 million (plus interest and costs) to the bank. According to the brief, ICC had a $10 million line of credit which was due on March 20, 2005 and which had not been paid. (This is in addition to the half billion that is covered by the previously described suit.)
In a very similar case, settled earlier this year, RTFC had filed against Vitelco for repayment of a $4 million loan; ICC had asked the court to transfer the case to the Virgin Islands' Federal District Court; the Alexandria-based judge had ruled against ICC and shortly thereafter the case was settled on terms agreeable to RTFC. Neither party, as is often the case, revealed the exact shape of the settlement.
In the $10 million suit, RTFC filed the complaint but has not yet served it on the other side, according to Siegfried.
Why this maneuver? According to the lawyer mentioned earlier: "sometimes a lawyer does this hoping for a settlement, and sometimes for other tactical reasons, like not setting in motion a series of deadlines."
ICC has not reacted with any public statements about either the recusal or the new $10 million suit.
Belize, the Central American nation whose phone company was controlled by Prosser for a while, has taken one aspect of its court battle with ICC to the Eleventh Circuit Court of Appeals. ICC, in early stages of the court case in Miami, had asked and secured a ruling from the District Court Judge that Belize was to be fined $50,000 a day for not reacting quickly enough to one of the judge's initial rulings that had been favorable to Prosser.
The fine, which Belizean media say eventually totaled more than $1 million, attracted the attention of the State Department not because it was taking sides in the GOB-ICC battle, but because it would set an unhappy international precedent for America. State did not like the prospect of foreign judges around the world fining the U.S. government for any of its actions.
The Source had previously reported that the State Department had taken this action, based on Belizean reporting. (See " State Department Backs Belize in Battle with Prosser").
It turns out that what State had done, at that time, was to petition the court for permission to file an amicus brief along these lines, as the deadline had passed for such a filing. After it had secured permission from the court for the late filing, the State Department then filed the brief.
In that brief the Department made it clear that "We take no position . . . whether the district court correctly exercised jurisdiction . . . We take no position on whether the Government of Belize violated the district court's preliminary injunctive order."
It went on to point out the worldwide uniqueness of the proposed fine: "This litigation is the only instance of which we are aware in which any court, domestic or foreign, has imposed monetary sanctions against a foreign state for failure to comply with a court order." (Italics in the original).
The State Department then provided a detailed explanation of why it thought it was bad public policy for the Florida court, or any other, to lay such fines on a sovereign nation; it noted the laws of a number of nations (UK, Canada, Australia, Singapore, etc.) on the subject, and cited precedents in U.S. law as far back as 1812 to support its position. (One of the cases cited has a Virgin Islands touch to it: Argentine Republic v. Amerada Hess Shipping Corp., 488 US 428, 109 S. Ct. 683 (1989), though there appears to be no direct reference to the U.S.V.I. in the 85-page brief.)
The State Department felt strongly enough about the case that it requested permission from the Eleventh Circuit to send an attorney to Atlanta to make an oral argument about the matter.
Meanwhile Prosser's lawyers have filed for reconsideration of the decision of Miami U.S. District Court Judge Ursula Ungaro-Benages, which had gone almost completely for Belize and against ICC as to Prosser's complex efforts to maintain control of the Belizean phone company. (See " Prosser loses, Belize Wins in Miami Court.").
No further hearings in this matter have been scheduled as yet.
A recent article covers developments in the minority stockholders' suit against ICC. (See " Possibility of ICC Bankruptcy Becomes A Factor in Settlement of Delaware Case").
Meanwhile Prosser's lawyers are busy outside the U.S. as well, and in the two matters noted below, these lawyers are playing offense, not defense.
Pending in Toronto is Prosser's attempt to save his fortunes by taking Belize into international arbitration his claim of losses is $200 million (about the government's entire national budget of a couple of years ago.) The Belizean media have pointed out that GOB's financial straits are such that it agreed to both international arbitration and legal review in U.S. courts as part of its arrangement to borrow the money needed for the GOB to buy stock in its own phone company from British magnate Lord Michael Ashcroft in order to sell it to Prosser. When Prosser failed to make the final payment of $57 million, GOB was left with no deal, but all the disadvantages of the Miami court case and the Toronto arbitration.
As reported earlier, Prosser has hired William G. H
orton, a seasoned Toronto lawyer and arbitrator, to represent him in these UN-sanctioned proceedings. Belize has retained another senior Toronto attorney, Katherine Kay of the firm Stikeman Elliott; she will work with Moscowitz, Moscowitz & Magolnick, the Miami firm that successfully represented GOB in the most recent battles in the Miami courts.
Also reported earlier was an apparent Prosser victory (See " Prosser Seems to Have Won a Round in a Belizean Court").
In this instance one Belizean court overruled another that had ruled against Prosser but since the decision of the second court is, so far, an oral one, no one in the Belizean media is quite sure what this means. The written decision is due to surface in October
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