June 25, 2007 — In his latest financial filing with the U.S. Bankruptcy Court, Jeffrey Prosser's lawyer reports that the owner of Innovative Telephone Co. has given himself a $60,000-per-month raise, which works out annually to an additional $720,000 a year.
During the previous five months, the same series of reports has indicated an income of $120,000 per month for Prosser. No indication is given of which of his corporate entities pays him.
Similarly, the filing does not disclose whether the extra $60,000 is a one-shot event or part of a continuing pattern.
The report for May indicated Prosser received a sum of $10.85 in interest from a bank account and a transfer payment from his wife, Dawn, of $103,000, in addition to the $180,000 monthly salary.
In the last six months, Prosser's bottom line has improved, according to the reports. The lawyer doing the reporting, Robert F. Craig of Omaha, Neb., noted a cash balance on Dec. 1, 2006, of $250,666.56, which had risen to $332,237.67 by May 31, 2007. No indication is given of how an investor with a cash balance of more than a quarter of a million dollars makes only $10 a month in interest.
Craig reported the following expenditures in the cash-disbursements section of the report for May: $123,742 for legal and accounting fees; $40,000 to Banco Popular of Puerto Rico (which other documents indicate had lent him money to invest in the Community Bank of the Virgin Islands); $27,559.28 in mortgage payments; $10,000 to his wife for household and insurance payments; and $10 "other."
The money sent to Banco Popular was identified as "other secured payments" in the cash-disbursement report, and as "Banco–$40,000," a payment via Dawn Prosser, in another part of the statement. There were no other $40,000 transactions.
Though the nine-page report lacks detail, it contains several internal discrepancies.
While the summary of disbursements shows $27,559.28 in mortgage payments, attachment five of the report shows that figure alone for a Bank of America mortgage, $8,759.59 for payment of a First Bank Puerto Rico mortgage and $6,992.15 for a payment to PPH Mortgage.
While the summary indicates payment of the $40,000 to Banco Popular, attachment five shows this amount as owed but not paid for the month.
Similarly, the May report's cash-disbursements section indicates that in the last six months a total of $30,000 had been spent on insurance. In another section, insurance on the Prosser residence in New York is noted as costing $4,671 for the year and insurance on the Florida residence at $75,812, for a total of $80,473. There is no indication of any insurance payment made on the residence on St. Croix.
The May report shows no payments as yet to the examiner who has been appointed by the bankruptcy court to look into Prosser's finances. These payments, which will be made by Prosser, will be substantial, as they go to the examiner — himself a retired federal bankruptcy judge — and his support teams of lawyers and accountants. Perhaps these payments will appear in future monthly reports.
The latest report is document No. 625 in the bankruptcy case. It can be seen by subscribers to the federal judiciary's Internet filing system (PACER) at a cost of 72 cents.
The bankruptcy case has now settled into a routine of monthly hearings. The next one will be on June 28 at the federal courthouse on St. Thomas, with U.S. Bankruptcy Court Judge Judith K. Fitzgerald presiding.
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