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HomeNewsArchivesSenate Minority Calls for Legislature to Examine Innovative Bankruptcy Issues

Senate Minority Calls for Legislature to Examine Innovative Bankruptcy Issues

Sept. 12, 2007 — The Minority Caucus of the 27th Legislature has asked Senate President Usie Richards to schedule a meeting of the Committee of the Whole to look into the issues raised in the Innovative bankruptcy proceeding.
The minority has grave concerns about the Innovative employees' pension plan and about the level of attention to the issue being paid by the Public Services Commission (PSC), according to a news release from the office of Sen. Ronald Russell. Richards responded by letter Wednesday, saying the Legislature’s calendar is full for the near future and suggesting committee hearings instead.
“You may consider requesting of your fellow minority colleague, Sen. Juan Figueroa-Serville, who serves as chairman of the Committee on Labor, to include the matter on the agenda,” Richards wrote. The Labor Committee is scheduled to meet Sept. 26. Richards also said the Committee on Economic Development and Agriculture, chaired by Sen. James Weber III, was an appropriate venue for some of the issues.
A federal bankruptcy judge in Pittsburgh recently took away control of Innovative and its subsidiaries from majority owner Jeffrey Prosser and gave it to a court-appointed trustee. The companies include the local phone company, Vitelco, the cable company, the V.I. Daily News and half a dozen other corporations. One of the principal reasons cited by Judge Judith Fitzgerald was Innovative’s failure to pay more than $10 million into the pension plan. (See "Judge Strips Prosser of Power Over Company Operations.")
The PSC had a meeting scheduled for this Thursday with the trustee, but canceled on Monday, citing a lack of a quorum. The PSC also canceled its previous meeting concerning Vitelco in May. (See "PSC Cancels Another Meeting with Trustee in Prosser Bankruptcy Case.")
“It is the employees who are losing in this bankruptcy,” said Sen. Juan Figueroa-Serville.
Another, unnamed minority senator said, “It is highway robbery that the owner could take pay of $60,000 every two weeks from the company, i.e. $1,560,000 annually, and not pay the employees pension benefits of over $10,000,000,” according to the news release. (See "Prosser Gives Himself a $60,000-a-Month Raise.")
The minority caucus release continues, “The Public Services Commission has completely failed to regulate, oversee, monitor and control Innovative. The PSC is charged with protection of the public interest. However, the PSC’s actions appear to show negligence in monitoring, controlling and regulating Innovative and favoritism by testifying and taking positions in the bankruptcy that may be against (the) public’s interest.”
The Source spoke with Sen. Louis Hill, a member of the minority, about the request for a meeting of the Committee of the Whole.
“The PSC has not been as responsive, they have not exercised as much oversight as I believe they should have over this issue of Innovative and Vitelco,” he said. “This position that (PSC attorney Jeffrey) Moorhead has taken against the trustee is very surprising, given that the federal judge found Prosser in violation on so many issues. What the judge did was in the best interest of the employees, and the PSC I find is obstructing the process.”
The PSC appeared to be selective in its enforcement and regulation, treating the V.I. Water and Power Authority, for example, much more harshly than Prosser's companies, Hill said.
“They come down like a ton of bricks on WAPA and are extremely lenient on Vitelco,” Hill said. “Why, I cannot say. But clearly the whole process has been skewed. WAPA is a non-profit, government-owned entity, while Innovative is a private, for-profit company that hasn’t been taking care of its employees.”
Sen. Neville James cited Innovative’s failure to re-invest and upgrade the telecommunications infra-structure in the territory.
“Reinvestment, modifications, repair, maintenance and capital projects for infrastructure are all essential to good customer service and employee morale,” James said.
Sen. Basil Ottley said he wants to find out how the pension plan is going to be repaid, and by whom.
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