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Mercedes Leased for Prosser's Brother-in-Law at Issue in Bankruptcy Case

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Jan. 30, 2008 — A company-funded Mercedes for Jeffrey Prosser's brother-in-law is the latest controversial expenditure to face judicial scrutiny in the ongoing bankruptcy trial of Prosser, the former owner of Innovative Telephone Company.
Stan Springel, the court-appointed trustee of Innovative Communication Corporation, has asked the federal bankruptcy judge to terminate certain contracts signed by what the court terms New ICC that he regards as "of no benefit to the estate," with the estate being the former Prosser properties now being prepared for sale to meet various debts.
One of these contracts was a for a lease of a Mercedes-B CLK500A at $750.46 a month for the use of William Chow, whom Springel identifies as a former director of New ICC and Prosser's brother-in-law. The bill was paid by New ICC, the holding company for various Prosser enterprises such as the phone, cable and newspaper companies.
New ICC, according to Springel's submission to the court, also paid lesser sums for two cars both used by unnamed Prosser housekeepers, presumably in Florida. One such car is a 2007 Mitsubishi Outlander leased at $408.51 a month, and the other was a 2008 Mitsubishi Lancer for $285.10 a month. The 2007 Outlander, according to a car review on the Internet, is a small SUV that proves "that a compact SUV needn't be a practical boring choice, but that fun can follow function."
The most expensive of the five leases that Springel wants to terminate was a $835.31 per month deal on a 2004 Lexus GX 470 for Prosser's son, Adrian — who is, according to the document, no longer employed by New ICC. The fifth was for a Pontiac G6 that had been used by Cordell Johnson, who, according to court papers, "is still currently employed by New ICC but is no longer using the vehicle." That lease was for $473 a month.
Springel says that he has possession of all five vehicles and they are ready to be returned to their owners.
In addition to the five auto leases, Springel also wants court approval to eliminate a batch of other contracts, all of which, he says, are "of no benefit to the estate."
These include what is, or had been, a $5,000-a-month contract with Corner Stone Business Consultants to provide "assistance in its public and governmental relations in the Virgin Islands." The firm is not further identified in the court papers, but a search of V.I. property records shows a firm by that name owning a residential property, assessed at $26,590, at 4 First Ave., Kings Quarter.
Another contract whose termination is sought is that of Rothschild at $150,000 a month; this is the firm that Prosser retained in a futile effort to find financing for his properties. In this case (and in several others, including the leased Mercedes) Springel's document notes that the agreement in question probably has expired, but "the trustee has included the contract in this motion out of an abundance of caution."
The third contract to be terminated is with George Rachis, not further described.
In a separate action, Springel seeks court approval for shedding three real estate leases, all in West Palm Beach, Fla.
One is for Apt. F315, 701 S. Rosemary Ave., which "upon information and belief, (is) the apartment formerly occupied by Eling Joseph, an employee of New ICC, but it has been vacated." Joseph signed some of Prosser's documents filed with the court in the past. The rental there was $1,575 a month.
A rather grander apartment, at $4,300 a month, had been leased for "Deepak Anand, a former employee of New ICC, but has since been vacated." Apt. 24A was located at 525 S. Flagler Drive.
The third real estate transaction the trustee wants approved is the removal of New ICC's headquarters from West Palm Beach to the Virgin Islands; at one point the corporate offices were costing $4,678.75 a month in rent.
In other developments, Springel recommends the appointment of Christie's, the New York auction house, to handle the sales of "significant valuable furniture located at New ICC's corporate offices (the 'Bjerget House furniture') and art work (the 'Pissarro')."
Apparently Springel managed to work out an attractive deal with Christie's, because one of the filings states, "Because of the favorable fee structure negotiated by Springel the parties … have agreed to keep the terms of the document confidential." In the light of that agreement, Springel has asked the court to seal (i.e. keep secret) the terms and conditions. A hearing on this and other issues will take place Feb. 28.
Meanwhile, Springel, the Chapter 11 trustee, has taken a position against secrecy when it comes to the inventory of jewels and artwork in the possession of Prosser and his family. He argues that the bankruptcy law does not provide secrecy for such a document, though the presiding judge, Judith Fitzgerald, has initially ruled otherwise. There will be an emergency hearing on that matter Friday in Pittsburgh, Fitzgerald's home courtroom.
Springel's positions on these matters, in some of which he is joined by James Carroll, the court-appointed (Chapter 7) trustee for Prosser's personal interests, have been presented to the court by Daniel Stewart, an attorney with Vinson & Elkins, the Dallas law firm, joined in some instances by Benjamin A. Currence, the St. Thomas attorney.
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