March 21, 2017
Authored by: William Maloney
A Chapter 7 debtor’s failure to comply with a bankruptcy court order to preserve a $2 million dollar-plus collection of fine wines has led to the imposition of sanctions of over $1 million, most of which could be charged against the debtor’s otherwise exempt property.
The wine in question, after three years of litigation, was determined to be part of the bankruptcy estate of Jeffrey Prosser. Prosser used to own companies that provided telephone, internet and cable television service to the U.S. Virgin Islands. Both he and his companies filed bankruptcy in 2006. A recent, 66-page opinion from the U.S. District Court in the Virgin Islands sets forth this saga of the wine collection in great detail; if you are taken to oenophilia, be ready to despair. See In re Jeffery L. Prosser, Bankruptcy Case 2006-3009, Civil Action 3:2013-0087 (February 23, 2017, Doc. No. 58).
In its opinion, the district court largely upheld orders by the U.S. Bankruptcy Court of the Virgin Islands holding both Prosser and his wife, Dawn, in contempt