May 21, 2007 — One of Vitelco’s principal unions expressed support Monday for Jeffrey Prosser remaining the owner of Vitelco no matter what happens in ongoing bankruptcy negotiations between Vitelco’s owners — Prosser and Innovative Communications Corp. (ICC) — and several large lenders.
The statement of support issued by United Steelworkers of America Local 8545 is a bit of good news for Prosser and ICC after many months of bad news. Last year ICC and Prosser both declared bankruptcy in order to hold off two large creditors while the company reorganizes.
Since then, negotiations between Prosser and the lenders have remained strained. (See "Lenders Ask Bankruptcy Court to Enforce $520 Million Judgment Against Prosser, ICC.") Because of lender concerns about the safety of ICC assets, a federal trustee was appointed over the strenuous objections of the Public Services Commission.
“Local 8545 wishes to make clear that the union supports the current owner and the company's refinancing effort in order to retain control of Innovative,” union leaders wrote in a news release. “The union is concerned about any disruptions in employment that could result from a sale of the company to a party unfamiliar with business or the Virgin Islands community."
Union leaders hope to avoid the introduction of new problems, said Local 8564 Sub District Director Frederick Joseph.
“All I’m saying is we are supporting the present owner,” Joseph said Monday. “If Vitelco is sold, we don’t know who the next owner might be, and we’ve had problems in the past.”
The union’s move is surprising in part because, under Prosser’s stewardship, Vitelco has been attached with liens from the Pension Benefit Guarantee Corp. twice in as many years, with the PBGC asserting that Vitelco had not paid into the workers’ pension fund. Currently the PBGC says Vitelco is $6.7 million behind in pension-fund payments. (See "Federal Agency Files Liens Against Vitelco, Daily News Yet Again.")
When asked about the allegedly delinquent pension payments on May 10, ICC spokesman Holland L. Redfield II requested written questions to pass by company legal counsel and promised written answers. The Source asked:
— What payments have been made to the pension fund in the last 2 years?
— What is the correct amount that should have been paid into the pension fund?
— What is the reason these multimillion dollar payments were missed?
— Given the bankruptcy proceedings, the high level of debt of the parent company ICC and of Prosser personally, with payments not being put into the pension fund, what, if anything, safeguards that funding will exist for the promised pensions?
No written answers came. The Source asked Redfield about the pension fund again Monday.
“Vitelco has paid millions into the fund and will continue to do so,” Redfield said “This is nothing but a refiling of an old document brought by the current legal actions of ICC.”
Asked to elaborate on what payments had or had not been made and why, Redfield again offered to take written questions and pass them by legal counsel.
Asked whether it made sense to assume Prosser would automatically be better for labor than someone new, given the pension-fund shortages, Joseph said the pensions were a concern, but an out-of-territory owner concerned him more.
“We have over 300 members working for Prosser, and what happens to their jobs is our primary concern,” Joseph said. “We have a problem with them; they haven’t funded the pension. But it is easier to work with them and have them fund it than deal with the disruption a new owner might cause. They know they owe into the pensions and said they will do what is necessary to bring it up to date.”
Asked whether the Public Services Commission’s oversight of any new owner would assuage his concerns, Joseph said he didn’t want to rely on that oversight working effectively to preserve jobs if the new owner wanted to cut back.
Redfield greeted the union's support with pleasure.
“We see this move of support to ICC by labor, by the union, as significant,” he said. “There is no question in our minds that this support by the union is in the best interest of our employees, the company and our customers. We deeply appreciate this move on the part of labor — and it certainly enhances the stability of our company. We have at times been in different circumstances with labor. We know there is always a tension between management and labor and we understand labor's role, and the company wants to continue this partnership.”
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