Jeffrey Prosser, the former owner of Vitelco, Innovative Cable TV and Virgin Islands Daily News, has to appear in federal court Jan. 16 on contempt of court charges for defying a court order and selling stuff from his Estate Shoy’s property on St. Croix.
The new trouble comes more than a decade after he was forced into bankruptcy in 2006 as a result of borrowing half a billion dollars, then selling off part of the loan collateral as preferred stock.
There have been dozens of separate civil cases with many thousands of individual filings. Most of the family’s homes, wines, art and jewelry – all purchased with Vitelco funds – have long been sold off. But, like a holiday fruitcake re-gifted every year, the bankruptcy persists.
This time, estate trustees say Prosser defied court orders by secretly selling $50,000 worth of generators that no longer belong to him, pocketing the proceeds. The court appointed trustee, James P. Carroll, also accuses Prosser of trying to sell the estate itself for more than $1 million, despite the property being in foreclosure and placed in escrow by the court.
There are two former Prosser properties in Estate Shoy’s. One, the Prosser mansion, at 5 Anna’s Hope, Estate Shoy’s, was foreclosed on and has been on the market for years, but no one has offered enough to cover the bank debt, according to court documents. Around the corner are several plots of land at Estate Shoy’s, registered to both Dawn and Jeffrey Prosser.
Although Prosser used money from Vitelco to buy the land at Estate Shoy’s Plots 168-171, the court initially exempted it from the bankruptcy. The court ruled that the couple owned it as “tenants by the entirety,” meaning as a couple and not individuals, because it was purchased after they were married.
For that reason, only joint debts – held by both Prossers and secured by joint property – could be attached against the couple’s joint equity in the property. So, while other property was taken and sold at auction, the court initially allowed the couple to retain that land.
But in 2012, U.S. Bankruptcy Court made the Prossers sign over the land after they failed to pay nearly a million dollars in contempt of court sanctions. The court found they failed to obey a court order requiring them to protect a $2 million wine collection. Some of the wine disappeared and some spoiled after the refrigeration was turned off.
The Prossers filed appeals of the contempt findings, sanctions and transfer of the property and while the appeals were pending, asked the court to stay the sale of the property. The court granted the motion.
Then the Prossers reportedly started selling stuff.
According to Carroll, on Oct. 25, 2017, a neighbor in Estate Shoy’s told him “someone was removing a large generator out of the building located on Plot 168 of Anna’s Hope.”
Court documents say the V.I. Police Department “was presented with a Bill of Sale, signed by the Prossers, which provided for the sale of two 375 kw generators located at Plot No. 168 Anna’s Hope for $50,000.”
Then, on Oct. 27, the caretaker allegedly returned to the property and “found the purchaser and a crew preparing to remove the second generator and fuel tanks.” Carroll told the court removing the generators involved removing an eight-foot section of wall and cutting off locks.
Carroll also told the court that in May 2017, the Prossers listed the entire property for sale for $1,065,000, despite the court having already ordered the property be turned over to the trustee. He said the Prossers never disclosed this real estate listing.
In November, the court ordered the Prossers to put the $50,000 into an escrow account.
In December, U.S. District Judge Wilma Lewis ordered Jeffrey and Dawn Prosser to appear Jan. 16 in U.S. District Court on St. Croix to show cause as to why the Court should not find them in civil contempt” for violating the court order accepting that property as a bond in support of their appeal “by selling the generators on the Anna’s Hope Property, and allegedly placing the Property for sale without disclosing that fact to the Court or the Trustee … .”
The Prossers have filed a response saying they did not initially understand the terms of the court order to mean they could not sell the generators but now they do understand and will abide by the court’s order.
If the court imposes new sanctions, there may be few resources left to the Prossers to pay them with. The property was already bonded to pay existing sanctions. If any money was left over, it would go to the Prossers.
But along with the nearly $1 million in sanctions related to the wine, the court has imposed $137,000 in sanctions against Jeffrey Prosser for filing bogus bribery claims in bad faith to try to delay the bankruptcy proceedings. (See Related Links, below.)