Aug. 15, 2007 — The bankruptcy case of Jeffrey Prosser, owner of Innovative Telephone, became less transparent recently as the transcript of the most recent court hearing on Aug. 3 was sealed by the judge in the case.
The transcript of the Aug. 3 hearing in U.S. Bankruptcy Judge Judith K. Fitzgerald 's courtroom in Pittsburgh, Penn., is on the U.S. court systems' electronic bulletin board, PACER — but it is accessible only to the lawyers in the case.
The transcripts of prior hearings were lengthy and detailed, recording every word said by the judge and the small army of lawyers that appears for these hearings. Some of these ran over 200 double-spaced pages.
Prosser's lawyers have fought financial disclosure every step of the way through this case, which is now more than a year old. They argued that revealing anything about Prosser's finances would endanger what were at the time pending negotiations with financial organizations that might bail out the Prosser interests.
While numerous motions filed by Prosser's lawyers, and the replies thereto, have been similarly kept out of public view, transcripts of the hearings or parts of them have remained open as directed by the judge.
Fitzgerald has indicated, in prior transcripts, that she was uneasy with the secrecy and predicted that it would end– but not yet.
One of the judge's clerks in Pittsburgh confirmed to the Source that the Aug. 3 transcript had been sealed. Would that happen to the transcripts for the unusual, back-to-back hearings now slated for Sept. 6 and 7 in Pittsburgh?
"I can't predict; the judge makes that decision and she makes it on the day of the hearings," the clerk said.
Next month's hearings will cover how much is actually owed: about $402 million plus interest according to Prosser, or about $650 million plus interest, as the creditors have contended. The judge ruled earlier this summer that the higher figure is correct, and Prosser has asked Fitzgerald to reverse that ruling.
Another issue to be raised next month is whether the case should stay in Chapter 11 of the bankruptcy code, which allows the debtor time to reorganize his finances, or should be moved, as the creditors have asked, to Chapter 7 which demands the quick sale of assets.
The judge has never ruled on this motion, though she used the prospect of a Chapter 7 ruling to force Prosser to reveal his finances to the two intermediaries appointed by the judge — the examiner of Prosser's personal finances, and the trustee who is managing Prosser's assets.
Also on the docket next month are requests by various attorneys and the examiner to be paid for their work.
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