74.9 F
Charlotte Amalie
Saturday, January 28, 2023
HomeNewsArchivesJudge Strips Prosser of Power Over Company Operations

Judge Strips Prosser of Power Over Company Operations

Sept. 7, 2007 — Jeffrey Prosser, embattled owner of Innovative Telephone, lost control of his operating companies Friday in a major court battle in Pittsburgh.
Over the strenuous objections of his lawyers and the more muted ones by a representative of the V.I. Public Services Commission (PSC), a U.S. Bankruptcy Court judge took away Prosser's control of his operating companies and gave it to a court-appointed mainland business executive.
In issuing her decision, Judge Judith Fitzgerald cited the non-payment of some $10 million in pension payments to his workers while "Prosser keeps paying himself $60,000 every two weeks" as one of her reasons. (See "Judge to Open Documents to Public in Prosser Case.")
A seasoned West Coast turnaround specialist, Stan Springel, now has control of the local phone company, the cable company, the V.I. Daily News and half a dozen other corporations scattered throughout the Caribbean and France. Springel was present in the courtroom Friday. He was appointed trustee some months earlier, but before Friday’s court order felt he lacked sufficient leverage to run the companies.
Before Friday, Springel's assignment had been to manage two of Prosser's holding companies, Innovative Communication Company, LLC (the old ICC, in court terms) and Emerging Communications, Inc., and to make plans for using their assets to meet the needs of the bankruptcy suit, through either refinancing or a sale.
As trustee, he had formally asked the court to give him control of Innovative Communication Corporation (the new ICC), a subsidiary of the other two companies, and one not listed for bankruptcy until recently. The creditors supported his petition.
Friday afternoon, after two days of hearings, the judge issued an order from the bench giving him that control.
When the Source asked him to explain in layman's terms the significance of the decision, Springel said, "Now I can vote the shares of the new ICC to change the CEO of the firm, if I so choose."
St. Croix lawyer Jeffrey B.C. Moorhead, the PSC’s legal representative, spoke against the planned takeover, calling it "premature." Though Springel works in an inherently difficult situation "and sometimes I feel sorry for him," Moorhead said, the examiner has given the PSC insufficient attention.
Moorhead stressed the value of Vitelco's franchise and said it could not be transferred without PSC approval. The judge assured Moorhead she recognizes the important role the PSC plays and said the examiner shares her understanding.
A few months ago, Springel scheduled a meeting in the territory with the PSC, but the PSC canceled it, according to the examiner's attorney, Craig Rasile of the Richmond, Va., firm of Hunton and Williams. Perhaps Moorhead didn’t know about the canceled meeting, Rasile said.
Both Springel and Rasile said they would be in the territory Sept. 13 for a meeting with the PSC.
Regarding Springel's new role, Rasile told the court Springel had no intention of laying off V.I. workers or firing a bunch of operating company managers. If he plans to bid on some or all of the company, Prosser should be out of management, Rasile said. It would be a conflict of interest if Prosser were both setting the terms of the sale and participating in it, he said.
Rasile and several others said they didn’t know whether Prosser was interested in such bidding.
Prosser's attorneys argued that making Springel hands-on manager would interfere with the smooth operation of the ICC firms. They also said Springel already had the power to manage the firms, making the appointment unnecessary.
In making her decision, Fitzgerald agreed that perhaps Springel already had the needed power. But she said her decision was necessary to move the process forward. The judge also made it clear she wants Springel to see what can be done about the pension payments.
An attorney from the U.S. government’s Pension Benefit Guaranty Corporation played a minor but visible role in the proceedings. She brought with her a complete set of 14 liens filed against Vitelco and the Daily News for non payment into the pension system, dating from July 15, 2005, to July 15 of this year.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.




Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.