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Saturday, August 13, 2022
HomeNewsArchivesPartial Accounting Reveals Magnitude of Prosser Bankruptcy

Partial Accounting Reveals Magnitude of Prosser Bankruptcy

A partial accounting of the financial disaster associated with Jeffrey Prosser, former owner and CEO of Innovative Telephone, was revealed in bankruptcy court in Pittsburgh on Friday.
At the behest of former Innovative Telephone employee Cardinal P. Connor, the principal creditor in the case, a non-profit bank, reported that it had lent Prosser and his firms a total of at least $524.9 million (plus interest).
Connor had secured a court order demanding an accounting of the financial results of several years of bankruptcy proceedings dealing with Prosser’s one-time corporate interests.
The Virginia-based bank, the Rural Telephone Finance Cooperative, also owns a claim of $98.4 million against Prosser once held by the Greenlight Companies, the former minority stockholders in an earlier Prosser-controlled corporation. These two claims total $623.3 million (plus interest.)
Against this total, the court-appointed trustee of Prosser’s former corporate holdings, Stan Springel, reported through his attorneys that RTFC had collected $28 million from the sales of various Prosser assets.
RTFC still owns Innovative Telephone and cable holdings in the U.S. and the British Virgin Islands, as well as cable properties in the Dutch part of St. Maarten. RTFC owns these entities because, despite an extended campaign to sell them, no offer was received that the trustee regarded as acceptable.
RTFC does not have even the $28 million free and clear. The court filing indicated that it had lent (i.e. spent) $2.8 million to the bankruptcy estate to pay some of the professional fees of the trustees, their lawyers and their accountants. Further, an unknown amount of the $28 million went to Greenlight.
Other elements of the report:
1) a total of $26.9 million has been spent on the professionals involved in the case;
2) $2 million was paid to pension plans; and
3) other closing costs (from sales) and commissions came to $2.1 million.
The $26.9 million does not include lawyers’ and other fees paid by Prosser, or by the creditors, just those submitted by the court-appointed handlers of the estates.
The report was a partial one because it did not relate to Prosser’s private holdings, which are being handled by a different court-appointed trustee, John Carroll. The Florida and St. Croix mansions that may belong to Prosser, his former corporations or his wife, Dawn – the court has not yet settled the ownership – are among the assets still to be liquidated. Meanwhile, costs to the estate continue to rise as Prosser and his debtors engage in multiple law suits and appeals against each other. One of the minor costs in the litigation is caused by the distribution of legal papers filed in each step of the case to the other lawyers currently or once involved in the matter.
The report demanded by Connor, for instance, was thus dispatched to a list of 57 lawyers, in the U.S.Virgin Islands, in Puerto Rico, and on the U.S. mainland.
Many issues raised by Prosser have been rejected by the bankruptcy court; many of these he then raised again as a matter of reconsideration by the bankruptcy court, and again most have been rejected by the same judge, Judith Fitzgerald.
Then, numerous times, Prosser has appealed these decisions to the U.S. District Court in St. Thomas, usually to lose at this level, too.
He has then appealed some of the reversals at that level to the federal appeals court in Atlanta.
All this litigation has been expensive to the bankruptcy estates, and thus to the creditors.

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