Sept. 11, 2007 — The Public Services Commission on Monday indefinitely postponed a meeting scheduled for Thursday with Stan Springel, the federal trustee controlling the local phone company, the cable company, the V.I. Daily News and half a dozen other corporations, three days after a federal bankruptcy judge in Pittsburgh removed control from owner Jeffrey Prosser and placed it in the hands of the trustee.
During the Sept. 7 hearing, U.S. Bankruptcy Court Judge Judith Fitzgerald took control of Vitelco out of Prosser’s hands. PSC legal representative Jeffrey Moorhead argued against the action, calling it “premature.” (See "Judge Strips Prosser of Power Over Company Operations.") Moorhead also said Springel had not given the PSC enough attention and that control over Vitelco, in particular, could not be transferred without PSC approval.
But Springel's attorney says the PSC has twice canceled meetings to address the Prosser issues.
"We have been trying to meet with the PSC since March or April," Craig Rasile said Tuesday morning. The PSC canceled meetings scheduled for May 24 and again for Thursday of this week, he said. During that same period, the PSC has met several times, addressing issues with the V.I. Water and Power Authority, Port Authority and Waste Management Authority.
Under V.I. law, the PSC must approve a change in ownership or control of utilities such as the phone company. Not meeting with the trustee to address the issue might cloud the question of who controls the phone company until or unless the federal judge specifically addresses the PSC’s inaction. Under the terms of Fitzgerald’s recent ruling, however, Springel currently has full authority over all Prosser properties.
Two of Prosser’s properties, Vitelco and the Daily News, owe more than $10 million to their respective pension funds, and have not paid into the funds since at least July 2005. Fitzgerald cited this violation of federal law as a compelling reason to take control out of Prosser’s hands.
A PSC announcement says the meeting with Springel has been “postponed to a date yet to be determined,” and the “cancellation is due to the inability to form a quorum because of unforeseen circumstances, business schedules and religious observances that conflicts (sic) with the previously noted date.”
PSC Chairwoman Alecia Wells could not be reached for comment. PSC Attorney Tanisha Bailey-Roka, contacted Tuesday, said they were unable to form a quorum.
“One had Ramadan, another could not make it for scheduling reasons,” she said. “Commissioner Raymond Williams resigned, so there are only six functioning members. Two cannot make it, and we could not take any action without at least four.”
As to when a meeting might occur, Bailey-Roka said “there is no time frame at present.”
An Internet search on Ramadan found that normal business activities are permitted during the month-long Muslim holiday, although the faithful are expected to maintain especially high ethical standards that month. Principally, adherents fast during daylight hours.
Also on Monday, Prosser filed an appeal of Fitzgerald’s U.S. Bankruptcy Court decision to the Federal District Court on St. Thomas. (See "Prosser Appeals Latest Setback to Federal District Court.")
The brief says, in part, that Prosser has found an alternative source of financing, and letting him retain control would “allow for successful reorganization and prevent the dismantling of the new ICC enterprise and potential disruption of telecommunications service in the Virgin Islands.”
That new source of financing is Silver Point Capital, a Connecticut-based company specializing in financing companies in bankruptcy. Silver Point is currently involved in several controversies.
The United Steel Workers of America have charged that when Silver Point took over the New York-based FiberMark paper mill in 2006, they promptly gutted the pensions, cut benefits, unilaterally cut worker pay by up to $6 an hour and committed a number of other abuses and violations of labor law. The USW also alleges Silver Point stripped the paper mill of $218 million in assets before the year was out. The National Labor Relations Board has charged that Silver Point violated numerous labor laws, and has ordered a hearing before an administrative judge in Watertown, N.Y., on Sept. 25 to examine the charges.
In a similar vein, an Aug. 30 article in the Buffalo News by Alan Pergament says Silver Point’s takeover of Buffalo’s Channel 7 television station also resulted in immediate, major pay cuts, prompting a mass exodus of staff.
Closer to home, last December Silver Point loaned Golden Gaming $15 million, secured by the Great Pond land. On Aug. 30, it filed foreclosure papers on all of Golden Gaming’s land holdings, claiming the lands in payment of the debt.
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