Feb. 8, 2008 — Yet another Mercedes automobile used by Jeffrey Prosser, the fifth so far, has emerged in the bankruptcy case of the former owner of Innovative Telephone as well as a previously undisclosed bank account in the name of his wife, Dawn Prosser.
The latest luxury car came into the conversation with yet another rebuke from U.S. Bankruptcy Court Judge Judith K. Fitzgerald.
The judge had earlier approved the sale of two Prosser Mercedes, along with a really expensive Bentley, that had been garaged in Florida. She also approved the sale of a third Mercedes that Prosser had used on St. Croix.
Then came the revelation that a fourth Mercedes had been leased by Innovative Communications Corporation for Prosser's brother-in-law William Chow. That lease has since been cancelled. (See "Mercedes Leased for Prosser's Brother-in-Law at Issue in Bankruptcy Case.")
Last Friday at a hearing in Pittsburgh a dispute arose about the disposition of the fifth Mercedes, in this case a "1998 or 1999" model that the Prossers had used at their Lake Placid, N.Y., residence.
Stan Springel, the court-appointed Trustee, had sought to sell the New York car for at least $20,000 but had managed to secure a bid for only $19,750; Springel wanted to go ahead with the sale at the lower price but the Prosser camp said no, they would pay $20,250 for the car.
At first, according to a just-released transcript of the hearing, it appeared that Prosser wanted to make the purchase but later it was learned that Dawn Prosser wanted to do so. Springel objected to selling the car to either Prosser "because of uncertainties about the source of funds that might be used."
One of Springel's lawyers, Daniel Stewart of the Dallas firm Vinson & Elkins, said that the "Trustee wishes to sell this to a clear, arm's length, third party and not to the debtor's wife."
The judge agreed with the trustee, noting that Prosser has argued that all his assets are tied up and he is now "destitute." Fitzgerald said she could not understand "how someone can come up with an offer in the nature of $20,000 for a car when they can't make mortgage payments on the house they're living in."
Later in the hearing another of Springel's lawyers, James Lee of the same Dallas firm, mentioned in the course of an argument on a different issue that Dawn Prosser had substantial funds that have not been previously disclosed.
"Well," Lee said, "we went and got Dawn Prosser's Bank of America accounts that were in response to a subpoena. And lo and behold, she got hundreds of thousands of dollars running through as recently as December of this past year, $91,000 deposit goes into that account. There are others coming from Vitelco in the past several months, from Jeff Prosser."
A few minutes later, during an argument whether Dawn Prosser could afford to hire her own lawyer, Lee said, "according to Dawn Prosser's Bank of America accounts, December is the last one I have. I mean, she had $159,000 on deposit."
Lee did not provide any details about the deposits apparently coming from Vitelco or indicate what had happened to those funds.
Toward the end of the hearing Fitzgerald admitted a judicial error, in that, because of a misunderstanding with her clerks, the court had issued an order, which Prosser had requested, sealing an inventory of jewels and art work in the possession of the Prossers.
Springel had filed papers asking the judge to reverse herself on that issue, and she did partially. She ruled that while Prosser's possessions had to be listed in public those that Dawn Prosser claimed to be hers needed to be recorded with the court, but not published.
Meanwhile, on a more substantive level, the court accepted Springel's detailed plan to sell off Prosser's corporate properties to pay the debts of Prosser and his firms. Unless an overall offer is judged to be best for the estate, the properties are to be divided into three lots for the sale. One lot consists of Vitelco and other non-French telecommunications properties, another lot being the French properties (in the Down Islands and in eastern France), and the third being the Virgin Islands Daily News.
Springel's lawyer said there had been a number of inquiries about the properties. The auction is to take place on May 12, 2008, at 10 a.m. at the offices of Vinson & Elkins, L.L.P., in Dallas. The trustee will determine who the qualified bidders will be and confine participation in the auction to those bidders.
Back Talk
Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
