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Prosser Loses Another V.I. Lawyer

Nov. 3, 2008 — A third V.I. lawyer has left the Jeffrey Prosser ship in the ongoing bankruptcy trial of the former owner and CEO of Innovative Telephone, either the fourth or fifth such withdrawal by a local or mainland law firm.
Routinely in lawyer-client relationships, a lawyer wanting to terminate relations with a client conveys the message privately by telephone or letter. But in bankruptcy court cases, the lawyer is obliged to explain, in public, why he or she wants to end the relationship, and must ask the judge's permission to do so.
The latest V.I. lawyer to say goodbye to Prosser is A. Jeffrey Weiss of St. Thomas. His Oct. 28 filing with the bankruptcy court explains, "… the amount owed to the undersigned [Weiss] is substantial, and the undersigned certifies that it has been and will create an undue hardship on him if leave to withdraw is not granted …. In addition, there has been a breakdown in the attorney-client relationship such that Mr. Prosser no longer believes that my services or expertise are needed or required, and as Mr. Prosser is disputing the amounts of movant's invoices going back to April 2008 …."
The judge has yet to decide on his motion. On three earlier occasions she approved the withdrawal of attorneys who had previously represented various Prosser interests.
On March 18, Judge Judith Fitzgerald issued an order granting Hamm and Barry, a Christiansted firm, permission to withdraw its representation of Dawn Prosser, Jeffrey's wife. The firm had argued that its employee who had been handling the case, Mark Eckard, was leaving the firm and "that each of the three full-time attorneys that will remain at Hamm and Barry lack the in-depth knowledge of and/or experience with bankruptcy law required to represent Mrs. Prosser in this case."
On Oct. 4, 2006, Thomas Alkton, another Chirstiansted lawyer, asked to be excused from his work for Prosser on the grounds that the proceedings "have been converted to a 'Chapter 7' and counsel is not prepared to such a different role as counsel." In other words, the court had changed the type of bankruptcy case it was hearing.
In addition, a non-V.I. firm, McGill, Gotsdiner, Workman and Lepp, of Omaha, Neb., asked the court on April 11 to excuse it from the task of representing the adult Prosser children. The grounds were, according to a court filing, "… the Prosser Children have failed to pay the attorneys' fees due under the written representation agreement and have also failed to maintain communication with counsel and cooperation with counsel necessary for proper representation …."
In what may have been the fifth such withdrawal, there is a mystifying lawyer-departure document filed recently in the case by Husch Blackwell Sanders, a Kansas City, Mo., firm. It filed a two-sentence motion Aug. 15 withdrawing "its proof of claim (No. 21) in the amount of $53,321.78, filed on or about Oct. 29, 2007." The motion was approved by the judge on Oct. 29 in a one-sentence order.
Since the document reference number included in the motion was incomplete, and since there are literally thousands of documents in the various Prosser proceedings, it is not evident what caused the Kansas City firm to file the bill in the first place, or why it withdrew the claim. Nor is it clear who their client — or perhaps alleged client — was.
Meanwhile, in two other unrelated developments, there appeared to be forward motion on the question of selling millions of dollars worth of the Prosser's fine wines and some further enlightenment on the sale of the Prossers' summer home in Lake Placid, N.Y.
James P. Carroll, the court-appointed Chapter 7 trustee handling Prosser's personal (as opposed to corporate) finances, has filed a document saying he has worked out a compromise with Dawn Prosser about the disposition of what he says are more than $2 million worth of fine wines. The wines are to be divided into two equal halves — those she claims and those that are owned by the creditors' estate. Then, if the court approves, the estate's wines are to be sold and the question of who owns the remaining wines will be worked out later.
Carroll wants to move quickly on this matter before the growing recession further lowers the value of luxury goods, such as these wines. The court will have the proposed wine sale on its agenda Nov. 10.
As to the house on Lake Placid, the Source previously reported that there had been two court orders, one approving the sale of the property for $3.55 million and a later one regarding a sale for $2.7 million, with no explanation of what happened to the earlier proposed sale. (See "Falling Real Estate Prices Impact Prosser Case.") A court order issued Oct. 31 explained what happened: In the order, the judge approved the transfer of a $200,000 good faith deposit made by the first would-be purchaser, John D. Klingerman, to the trustee's account. Klingerman lost the money when he failed to conclude the purchase.
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