Feb. 8, 2008 — The voters in the Central American republic of Belize Thursday tossed out the party in power by a large margin, and there may be a ripple effect on Jeffrey Prosser's creditors.
It's complicated.
Prosser, former owner of Innovative Telephone, had a disastrous financial adventure a few years ago with the then-monopoly phone company in what had been British Honduras. Prosser, apparently using money secured by selling preferred stock in Vitelco, gained momentary control of Belize Telecommunications during the regime of Prime Minister Said Mussa, and then lost control during a conflict-ridden period in which Prosser failed to pay the balance due on the company stock.
Mussa's government had purchased the phone company from Lord Michael Ashcroft, a controversial British investor/politician (a member of the UK's House of Lords). The government then sold the phone system to Prosser, who made a multimillion dollar downpayment and agreed to take on certain other obligations, with the final payment to come later.
The second payment was not made and, amidst a complex controversy, the local government seized control of the phone system — and turned around and sold it back to Ashcroft. Then everyone involved sued everyone else in the courts of Belize, the United States and Great Britain; in addition, Prosser took Belize into a Canada-based international arbitration process.
Prosser won some cases in Belize, and declared that Mussa ignored his own nation's courts. One or more of those cases have gone to Britain's Law Lords, the ultra-supreme court for Belize and some other ex-British colonies. Prosser lost in the federal courts in Miami, and has appealed that loss to the federal circuit court in Atlanta, where it is still pending.
Meanwhile, Prosser and his firms went into bankruptcy. Last year the U.S. bankruptcy judge appointed West Coast businessman Stan Springel trustee of what had been Prosser's corporate holdings, including whatever equity Prosser had retained in the Belizean phone system. So now one of the assets of Prosser's creditors is a minority block of stock in the phone company controlled, once again, by Ashcroft.
Now owning a chunk of stock in the Belize phone company is not like owning some shares of, say, AT&T — dividends are sent to you every quarter, and you can call up your broker and unload the shares whenever you desire. The Musa government, at Ashcroft's request, passed a law saying that the majority stockholder could suspend dividends on blocks of stock like Prosser's, which the British entrepreneur did. Ashcroft has enough money so that he can get along without the dividends, but the lack of them makes the once-Prosser-owned stock hard to sell.
A further complication: At one point a couple of years ago, Prosser retained a Belizean attorney named Dean Barrow to go into court for him. Barrow is the new prime minister. At other times Barrow, as a member of the local parliament, was harshly critical of Mussa's sale of the phone company to Prosser, saying the deal was unfair to Belizean consumers.
Speaking generally, in financial controversies when new players emerge — in this case a new government in Belize, and Springel — new possibilities for negotiations may appear. If the creditors can, under these circumstances, pry some money out of Prosser's failed investment in Belize, it would help them, and might even ease some indirect financial pressures on those using the services of the V.I. phone company.
Meanwhile, a relevant elections issue has emerged on the U.S. mainland, as well. One of Prosser's most ardent supporters in the U.S House of Representatives, Republican Congressman Jerry Weller of downstate Illinois, has decided not to seek reelection. At one point Prosser enlisted Weller, who has strong interests in Central America, to apply pressure on Musa to treat Prosser differently. Soon both Musa and Weller will be out of power.
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