Discussion of Issues
Issue
1: Should the
Commission notify the Division of the Commission Clerk & Administrative
Services to request permission from the Florida Department of Financial Services
to write-off the uncollectible amount of $10,000 due to the bankruptcy of
Preferred Carrier Services, Inc.?
Recommendation: Yes. (L.
Fordham, R. Kennedy)
Staff Analysis: On
December 7, 1998, the Commission issued Order No. PSC-98-1627-AS-TI approving
Preferred Carrier Services, Inc.’s offer of settlement to resolve the company’s
apparent violation of Rule 25-4.118, Florida Administrative Code, Interexchange
Carrier Selection (slamming). Preferred Carrier Services, Inc.’s settlement
offer included a voluntary contribution of $50,000 to the General Revenue
Fund. The company proposed to pay the $50,000 in five equal payments of
$10,000. The company paid the first four installments for a total of $40,000.
The last installment of $10,000 was due on December 1, 1999. The last
installment was not paid because Preferred Carrier Services, Inc. filed for
Chapter 11 bankruptcy protection in the US Bankruptcy Court - Northern District
of Texas on September 18, 1999, Case No. 99-38082.
Chapter 11 of Section 109 of the Federal
Bankruptcy Code provides for reorganization by business entities. The filing
of a bankruptcy petition under Chapter 11 invokes an automatic injunction known
as the Automatic Stay, codified in Bankruptcy Code Section 362. Section
362(b)(4) provides that, for governments, the filing of the petition does not
operate as a stay of the enforcement of a judgment, other than a money
judgment, obtained in an actual proceeding by a governmental unit to enforce
such governmental unit’s police or regulatory power. Thus, it would appear
that we are not enjoined from exercising our police powers to protect public
health, safety and welfare, but are enjoined from exercising our regulatory authority
seeking to collect a pre-petition debt.
Preferred Carrier Services, Inc. listed the State
of Florida (Florida Public Service Commission) as a claimant for the $10,000
balance owed in Docket 971485-TI when it filed for bankruptcy with the US
Bankruptcy Court - Northern District of Texas. As documented in a Claims
Register Report issued by the US Bankruptcy Court - Northern District of Texas,
no monies from the proceedings were allowed for payment against the State of
Florida’s claim. Based on the actions of the US Bankruptcy Court – Northern
District of Texas, the debt owed by Preferred Carrier Services, Inc. to the
State of Florida was dismissed.
Preferred Carrier Services, Inc.
emerged from bankruptcy during October 2002. Preferred Carrier Services, Inc.
has consistently paid its regulatory assessment fees each year that it has been
authorized by the Commission to provide intrastate interexchange
telecommunications services in Florida.
Based on this
information, staff recommends that the Commission
notify the Division of the Commission Clerk & Administrative Services to
request permission from the Florida Department of Financial Services to
write-off the uncollectible amount of $10,000 due to the bankruptcy of
Preferred Carrier Services, Inc. The Commission is vested with
jurisdiction over this matter pursuant to Sections 364.02, 364.285, and 364.603,
Florida Statutes.
Issue
2: Should this
docket be closed?
Recommendation: Yes. (L.
Fordham)
Staff Analysis: If the
Commission approves staff’s recommendation in Issue 1, this docket should be
closed as there are no other issues that need to be addressed by the
Commission.