Jan. 10, 2007 — The V.I. Public Services Commission filed papers with the U.S. Bankruptcy Court on Monday, Jan. 9, seeking to intervene in the pending bankruptcy cases of Innovative Communications Corp. owner Jeffrey Prosser.
The papers indicate that the PSC seeks to become an active player in the bankruptcy proceedings and supports Prosser's position regarding the venue for the cases and the appointment of a trustee.
Three motions were filed by PSC attorney Jeffrey B.C. Moorhead on Monday. The first asks that the PSC be granted the status of "party in interest" so that it could formally participate in the proceedings. The commission cited three New England precedents regarding state regulatory agencies and federal bankruptcy proceedings; in only one of the three cases cited was full "party in interest" status granted. The other two state agencies cited in the brief received lesser status.
The other two motions mirrored legal moves taken by Prosser's attorneys. In one, the PSC's lawyers asked that the Bankruptcy Court not appoint a neutral case trustee until certain conditions were imposed (to make sure that the PSC had a significant say in the matter); and in the other, the PSC supported Prosser's earlier motion to take the cases away from the U.S. Bankruptcy Courts entirely and assign them to the U.S. District Court in St. Thomas.
This is important because Judge Curtis Gomez, who has ties to Prosser through ICC Vice President Holland Redfield, would then hear any appeals — unless he recused himself.
Without exploring the legal ramifications of possible conflicts between federal law (which gives bankruptcy judges full power to appoint neutral case trustees) and territorial law (which requires the PSC to rule on the ownership of public utilities), the PSC brief stressed the importance of the territorial law.
Does territorial law, in this case, trump federal law? Although the subject is not broached in the Jan. 9 filing, it might be a future argument by Prosser's lawyers.
There is other evidence within the filings to indicate that they were done hurriedly. For example, the last sentence of the very short brief seeking to dismiss the Bankruptcy Courts reads, verbatim: "For the foregoing reason, the PSC respectfully that the ratepayers and general public can observe these proceedings first hand." [One assumes the missing word, after "respectfully," would be "requests."]
It is not clear when Bankruptcy Judge Judith K. Fitzgerald will conduct a hearing on these matters, or rule on them. There will be a hearing in Pittsburgh on Jan. 12 on other elements in these cases.
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