Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - FIRSTFED FINANCIAL CORP | d8k.htm |
Exhibit 99.1
UNITED STATES DEPARTMENT OF JUSTICE
OFFICE OF THE UNITED STATES TRUSTEE
CENTRAL DISTRICT OF CALIFORNIA
| In Re: | CHAPTER 11 (BUSINESS) | |||||||
| FirstFed Financial Corp |
||||||||
| Case Number: | 2:10-bk-12927-ER | |||||||
| Operating Report Number: | 11 | |||||||
| Debtor(s). | For the Month Ending: | November 30, 2010 | ||||||
I. CASH RECEIPTS AND DISBURSEMENTS
A. (GENERAL ACCOUNT*)
| 1. |
TOTAL RECEIPTS PER ALL PRIOR GENERAL ACCOUNT REPORTS |
227,886.56 | ||||||||
| 2. |
LESS: TOTAL DISBURSEMENTS PER ALL PRIOR GENERAL ACCOUNT REPORTS | 151,160.91 | ||||||||
| 3. |
BEGINNING BALANCE: |
3,918,612.69 | ||||||||
| 4. |
RECEIPTS DURING CURRENT PERIOD: |
|||||||||
| Accounts Receivable—Post-filing |
||||||||||
| Accounts Receivable—Pre-filing |
||||||||||
| General Sales |
||||||||||
| **Other—Insurance Refund |
121.89 | |||||||||
| TOTAL RECEIPTS THIS PERIOD: |
121.89 | |||||||||
| 5. |
BALANCE: |
3,918,734.58 | ||||||||
| 6. |
LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD |
|||||||||
| Transfers to Other DIP Accounts (from page 2) |
0.00 | |||||||||
| Disbursements (from page 2) |
192,439.75 | |||||||||
| TOTAL DISBURSEMENTS THIS PERIOD:*** |
|
192,439.75 | ||||||||
| 7. |
ENDING BALANCE: |
3,726,294.83 | ||||||||
| 8. |
General Account Number(s): |
xxxxxxxxxx | ||||||||
| Union Bank | ||||||||||
| Depository Name & Location: |
445 South Figueroa | |||||||||
| Los Angeles, CA 90071 | ||||||||||
| * | All receipts must be deposited into the general account. |
| ** | Include receipts from the sale of any real or personal property out of the ordinary course of business; attach an exhibit specifying what was sold, to whom, terms, and date of Court Order or Report of Sale. |
| *** | This amount should be the same as the total from page 2. |
Page 1 of 18
TOTAL DISBURSEMENTS FROM GENERAL ACCOUNT FOR CURRENT PERIOD
| mm/ dd/yyyy |
Check Number |
Payee or DIP account |
Purpose |
*Amount Transfered |
**Amount Disbursed |
Amount | ||||||||||||||
| 11/10/2010 | 1049 | Landau, Gottfried, & Berger | Legal-Bankruptcy Counsel | 96,843.02 | 96,843.02 | |||||||||||||||
| 11/10/2010 | 1050 | RR Donnelley | 8-K filing | 2,339.00 | 2,339.00 | |||||||||||||||
| 11/10/2010 | 1051 | Registrar & Transfer Co. | Transfer Agent Fees | 893.15 | 893.15 | |||||||||||||||
| 11/10/2010 | 1052 | Chris Damore | Accounting Svcs-Oct | 1,360.00 | 1,360.00 | |||||||||||||||
| 11/10/2010 | 1053 | Riordon, Lewis & Haden | Fed-Ex charges | 20.68 | 20.68 | |||||||||||||||
| 11/15/2010 | EFT | Hartford Insurance | payroll costs, workman’s comp | 48.00 | 48.00 | |||||||||||||||
| 11/17/2010 | Wire | Delta Corps | Professional Svcs. (Jul-Aug) | 40,000.00 | 40,000.00 | |||||||||||||||
| 11/29/2010 | 1054 | Riordon, Lewis & Haden | Rent-Dec | 1,500.00 | 1,500.00 | |||||||||||||||
| 11/29/2010 | 1055 | Carl W McKinzie | Professional Svcs. (Sep-Nov) | 48,000.00 | 48,000.00 | |||||||||||||||
| 11/29/2010 | 1056 | RR Donnelley | 8-K filing | 844.00 | 844.00 | |||||||||||||||
| 11/29/2010 | 1057 | Registrar & Transfer Co. | Transfer Agent Fees | 591.90 | 591.90 | |||||||||||||||
| — | ||||||||||||||||||||
| — | ||||||||||||||||||||
| — | ||||||||||||||||||||
| TOTAL DISBURSEMENTS THIS PERIOD: | — | 192,439.75 | 192,439.75 | |||||||||||||||||
| * | Fill in amounts in this column if they are TRANSFERS to another DIP account (e.g. Payroll or Tax); the “amount” column will be filled in for you. |
| ** | Fill in amounts in this column if they are DISBURSEMENTS to outside payees; the “amount” column will be filled in for you. |
Page 2 of 18
GENERAL ACCOUNT
BANK RECONCILIATION
| Bank statement Date: |
11/30/2010 | Balance on Statement: | $ | 3,729,746.73 | ||||||||
| Plus deposits in transit (a): |
||||||||||||
| Deposit Date |
Deposit Amount | |||||||||||
| TOTAL DEPOSITS IN TRANSIT |
0.00 | |||||||||||
| Less Outstanding Checks (a): |
||||||||||||
| Check Number |
Check Date |
Check Amount |
||||||||||
| 1052 | 11/10/2010 | 1,360.00 | ||||||||||
| 1054 | 11/29/2010 | 1,500.00 | ||||||||||
| 1057 | 11/29/2010 | 591.90 | ||||||||||
| TOTAL OUTSTANDING CHECKS: |
3,451.90 | |||||||||||
| Bank statement Adjustments: |
||||||||||||
| Explanation of Adjustments- |
||||||||||||
| ADJUSTED BANK BALANCE: |
$ | 3,726,294.83 | ||||||||||
| * | It is acceptable to replace this form with a similar form |
| ** | Please attach a detailed explanation of any bank statement adjustment |
Page 3 of 18
I. CASH RECEIPTS AND DISBURSEMENTS
B. (PAYROLL ACCOUNT)
| 1. | TOTAL RECEIPTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS |
0.00 | ||||||||
| 2. | LESS: TOTAL DISBURSEMENTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS |
310,028.58 | ||||||||
| 3. | BEGINNING BALANCE: |
189,971.42 | ||||||||
| 4. | RECEIPTS DURING CURRENT PERIOD: |
|||||||||
| 5. | BALANCE: |
189,971.42 | ||||||||
| 6. | LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD TOTAL DISBURSEMENTS THIS PERIOD:*** |
10,820.67 | ||||||||
| 7. | ENDING BALANCE: |
179,150.75 | ||||||||
| 8. | PAYROLL Account Number(s): |
|||||||||
| xxxxxxxxxx | ||||||||||
| Depository Name & Location: |
Union Bank | |||||||||
| 445 South Figueroa | ||||||||||
| Los Angeles, CA 90071 | ||||||||||
Page 4 of 18
TOTAL DISBURSEMENTS FROM PAYROLL ACCOUNT FOR CURRENT PERIOD
| Date mm/dd/yyyy |
Check Number |
Payee |
Purpose |
Amount | ||||||||
| 10/29/2010 |
EFT | Brian Argrett | Dec Salary (net of payroll taxes) | 7,132.30 | ||||||||
| 10/29/2010 |
EFT | various governments | Payroll Taxes—Dec | 3,632.70 | ||||||||
| 10/29/2010 |
EFT | CBIZ | Payroll Processing Charge | 55.67 | ||||||||
| Dec payroll paid on 11/30/10 by payroll processor | ||||||||||||
| TOTAL DISBURSEMENTS THIS PERIOD: | 10,820.67 | |||||||||||
Page 5 of 18
PAYROLL ACCOUNT
BANK RECONCILIATION
| Bank statement Date: | 11/30/2010 | Balance on Statement: | $ | 179,150.75 | ||||||||||||
| Plus deposits in transit (a): |
||||||||||||||||
| Deposit Date |
Deposit Amount | |||||||||||||||
| TOTAL DEPOSITS IN TRANSIT |
0.00 | |||||||||||||||
| Less Outstanding Checks (a): |
||||||||||||||||
| Check Number | Check Date |
Check Amount | ||||||||||||||
| TOTAL OUTSTANDING CHECKS: |
|
0.00 | ||||||||||||||
| Bank statement Adjustments: |
||||||||||||||||
| Explanation of Adjustments- |
||||||||||||||||
| ADJUSTED BANK BALANCE: |
|
$ | 179,150.75 | |||||||||||||
| * | It is acceptable to replace this form with a similar form |
| ** | Please attach a detailed explanation of any bank statement adjustment |
Page 6 of 18
I. CASH RECEIPTS AND DISBURSEMENTS
C. (TAX ACCOUNT)
| 1. | TOTAL RECEIPTS PER ALL PRIOR TAX ACCOUNT REPORTS |
0.00 | ||||||
| 2. | LESS: TOTAL DISBURSEMENTS PER ALL PRIOR TAX ACCOUNT REPORTS | 0.00 | ||||||
| 3. | BEGINNING BALANCE: |
10,000.00 | ||||||
| 4. | RECEIPTS DURING CURRENT PERIOD: |
|||||||
| 5. | BALANCE: |
10,000.00 | ||||||
| 6. | LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD TOTAL DISBURSEMENTS THIS PERIOD:*** |
0.00 | ||||||
| 7. | ENDING BALANCE: |
10,000.00 | ||||||
| 8. | TAX Account Number(s): |
xxxxxxxxxx | ||||||
| Union Bank | ||||||||
| Depository Name & Location: |
445 South Figueroa | |||||||
| Los Angeles, CA 90071 | ||||||||
Page 7 of 18
TOTAL DISBURSEMENTS FROM TAX ACCOUNT FOR CURRENT PERIOD
| Date mm/dd/yyyy |
Check Number |
Payee |
Purpose |
Amount | ||||||||
| NONE |
none | |||||||||||
| TOTAL DISBURSEMENTS THIS PERIOD: |
0.00 | |||||||||||
Page 8 of 18
TAX ACCOUNT
BANK RECONCILIATION
| Bank statement Date: | 11/30/2010 | Balance on Statement: | $ | 10,000.00 | ||||||
| Plus deposits in transit (a): |
||||||||||
| Deposit Date |
Deposit Amount |
|||||||||
| TOTAL DEPOSITS IN TRANSIT |
0.00 | |||||||||
| Less Outstanding Checks (a): |
||||||||||
| Check Number |
Check Date |
Check Amount |
||||||||
| TOTAL OUTSTANDING CHECKS: |
0.00 | |||||||||
| Bank statement Adjustments: |
||||||||||
| Explanation of Adjustments- |
||||||||||
| ADJUSTED BANK BALANCE: |
$ | 10,000.00 | ||||||||
| * | It is acceptable to replace this form with a similar form |
| ** | Please attach a detailed explanation of any bank statement adjustment |
Page 9 of 18
I. D SUMMARY SCHEDULE OF CASH
ENDING BALANCES FOR THE PERIOD:
(Provide a copy of monthly account statements for each of the below)
| General Account: | 3,726,294.83 | |||||||||
| Payroll Account: | 179,150.75 | |||||||||
| Tax Account: | 10,000.00 | |||||||||
| *Other Accounts: |
||||||||||
| *Other Monies: |
||||||||||
| **Petty Cash (see below): | 11.24 | |||||||||
| TOTAL CASH AVAILABLE: |
3,915,456.82 | |||||||||
| Petty Cash Transactions: |
||||||||||
| Date |
Purpose |
Amount | ||||||||
| Opening balance | 11.24 | |||||||||
| 0.00 | ||||||||||
| 0.00 | ||||||||||
| 0.00 | ||||||||||
| 0.00 | ||||||||||
| 0.00 | ||||||||||
| 0.00 | ||||||||||
| TOTAL PETTY CASH TRANSACTIONS: |
0.00 | |||||||||
| ENDING PETTY CASH |
11.24 | |||||||||
| * | Specify the Type of holding (e.g. CD, Savings Account, Investment Security), and the depository name, location & account # |
| ** | Attach Exhibit Itemizing all petty cash transactions |
Page 10 of 18
II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS
AND OTHER PARTIES TO EXECUTORY CONTRACTS
| Creditor, Lessor, Etc. |
Frequency of Payments (Mo/Qtr) |
Amount of Payment | Post-Petition payments not made (Number) |
Total Due | ||||||||||||
| Regus Mgt, lessor* |
monthly | $ | 0.00 | 0 | 0.00 | |||||||||||
| Premier Business Centers** |
monthly | $ | 0.00 | 0 | 0.00 | |||||||||||
| Riordon, Lewis & Haden *** |
monthly | $ | 1,500.00 | 0 | 0.00 | |||||||||||
| TOTAL DUE: | 0.00 | |||||||||||||||
| * | FirstFed Financial Corp. vacated offices managed by Regus Mgt. on 06/22/10. |
| ** | FirstFed Financial Corp vacated offices managed by Premier Business Centers prior to 09/30/10. |
| *** | FirstFed Financial Corp entered into a new lease agreement effective 10/01/10. |
The offices are managed by Riordan, Lewis & Haden.
III. TAX LIABILITIES
FOR THE REPORTING PERIOD:
| Gross Sales Subject to Sales Tax: | 0.00 | |||||||||||
|
|
Total Wages Paid: |
|
10,000.00 | |||||||||
| Total Post-Petition Amounts Owing |
Amount Delinquent | Date Delinquent Amount Due |
||||||||||
| Federal Withholding* |
||||||||||||
| State Withholding* |
||||||||||||
| FICA—Employer’s Share* |
||||||||||||
| FICA—Employee’s Share* |
||||||||||||
| Federal Unemployment* |
||||||||||||
| Sales and Use |
||||||||||||
| Real Property |
||||||||||||
| Other-Delaware Franchise** |
3,125.00 | 0.00 | ||||||||||
| TOTAL: |
3,125.00 | 0.00 | ||||||||||
| * | Amounts paid through the payroll account. See “Total Disbursements from Payroll Account Current Period” |
| ** | The State of Delaware is requesting additional information from the Debtor as the Debtor changed its methodology from the authorized share method to the capital method (using gross assets). See also “Aging of Accounts Receivable” |
Page 11 of 18
IV. AGING OF ACCOUNTS PAYABLE AND RECEIVABLE
| *Accounts Payable Post-Petition |
Accounts Receivable | |||||||||||
| Pre-Petition | Post-Petition | |||||||||||
| 30 days or less |
30,471.15 | 0.00 | 0.00 | |||||||||
| 31—60 days |
0.00 | 0.00 | 0.00 | |||||||||
| 61—90 days |
0.00 | 0.00 | 0.00 | |||||||||
| 91—120 days |
0.00 | 0.00 | 0.00 | |||||||||
| Over 120 days |
0.00 | 124,600.00 | 0.00 | |||||||||
| TOTAL: |
30,471.15 | 124,600.00 | 0.00 | |||||||||
Delaware receivable of $124,600 proposed by Debtor is still pending.
V. INSURANCE COVERAGE
| Type |
Name of Carrier |
Amount of Coverage |
Policy Expiration Date |
Premium Paid Through (Date) |
||||||||||
| General Liability |
Hartford | 1,000,000.00 | 1/11/2011 | 1/11/2011 | ||||||||||
| Worker’s Compensation |
Hartford | 1,000,000.00 | 1/11/2011 | |
Paid with Payroll |
| ||||||||
| Casualty |
None | |||||||||||||
| Vehicle |
None | |||||||||||||
The Debtor also maintains directors and officers liability coverage purchased pre-petition for the 2009/2010 coverage year and an extended reporting period for the policies covering the 2008/2009 coverage year also purchased pre-petition.
VI. UNITED STATES TRUSTEE QUARTERLY FEES
(TOTAL PAYMENTS)
| Quarterly Period Ending (Date) |
Total Disbursements |
Quarterly Fees |
Date Paid | Amount Paid |
Quarterly Fees Still Owing |
|||||||||||||||
| 31-Mar-2010 |
134,229.09 | 975.00 | 18-Apr-2010 | 975.00 | 0.00 | |||||||||||||||
| 30-Jun-2010 |
157,114.39 | 1,625.00 | 20-Jul-2010 | 1,625.00 | 0.00 | |||||||||||||||
| 30-Sep-2010 |
89,586.25 | 975.00 | 12-Oct-2010 | 975.00 | 0.00 | |||||||||||||||
| 0.00 | ||||||||||||||||||||
| 0.00 | ||||||||||||||||||||
| 0.00 | ||||||||||||||||||||
| 0.00 | ||||||||||||||||||||
| 0.00 | ||||||||||||||||||||
| 0.00 | ||||||||||||||||||||
| 3,575.00 | 3,575.00 | 0.00 | ||||||||||||||||||
| * | Post-Petition Accounts Payable SHOULD NOT include professionals’ fees and expenses which have been incurred but not yet awarded by the court. Post-Petition Accounts Payable SHOULD include professionals’ fees and expenses authorized by Court Order but which remain unpaid as of the close of the period report |
Page 12 of 18
VII SCHEDULE OF COMPENSATION PAID TO INSIDERS
| Name of Insider |
Date of Order Authorizing Compensation |
*Authorized Gross Compensation |
Gross Compensation Paid During the Month*** |
|||||||
| Babette Heimbuch |
** | $ | 20,000/ month | 0.00 | ||||||
| Vikas Arora |
** | $ | 17,500/ month | 0.00 | ||||||
| Brenda Battey |
*** | $ | 20,000/month | 0.00 | ||||||
| Brian Argrett |
**** | $ | 10,000/month | 10,000.00 | ||||||
| * | Please indicate how compensation was identified in the order (e.g. $1,000/week, $2,500/month) |
| ** | Notice of Insider Compensation for Babette Heimbuch and Vikas Arora was filed and served on the UST and other necessary parties on January 7, 2010; no objections were filed. |
| *** | Ms. Heimbuch and Mr. Arora no longer work for the Debtor. Ms. Battey works periodically for the Debtor at a rate of $150.00 per hour. |
| **** | Notice of Insider Compensation for Brian Argrett was filed and served on the UST and other necessary parties on June 10, 2010; no objections were filed. Mr, Argrett was engaged by the Debtor upon the resignation of Ms. Heimbuch to provide Debtor with a second officer and to serve as its then Chief Executive Officer. Mr. Argrett currently serves as Corporate Secretary. |
VIII. SCHEDULE OF OTHER AMOUNTS PAID TO INSIDERS
| Name of Insider |
Date of Order Authorizing Compensation |
Description | Amount Paid During the Month |
|||||||||
| NONE |
||||||||||||
Page 13 of 18
IX. PROFIT AND LOSS STATEMENT
(ACCRUAL BASIS ONLY)
| Current Month | Cumulative Post-Petition | |||||||
| Sales/Revenue: |
||||||||
| Gross Sales/Revenue |
— | — | ||||||
| Less: Returns/Discounts |
— | — | ||||||
| Net Sales/Revenue |
— | — | ||||||
| Cost of Goods Sold: |
||||||||
| Beginning Inventory at cost |
||||||||
| Purchases |
||||||||
| Less: Ending Inventory at cost |
||||||||
| Cost of Goods Sold (COGS) |
— | — | ||||||
| Gross Profit |
— | — | ||||||
| Other Operating Income (Itemize) |
||||||||
| Operating Expenses: |
||||||||
| Payroll—Insiders |
10,000.00 | 286,153.85 | ||||||
| Payroll—Other Employees |
— | — | ||||||
| Payroll Taxes |
765.00 | 23,100.56 | ||||||
| Other Taxes (Itemize) |
— | — | ||||||
| Legal & Professional-Special Counsel * |
4,598.09 | 229,440.12 | ||||||
| Legal & Professional-Bankruptcy Counsel ** |
28,818.65 | 369,258.35 | ||||||
| Legal & Professional-Administration *** |
88,000.00 | 88,000.00 | ||||||
| Legal & Professional-Accounting & Auditing **** |
552.50 | 6,140.00 | ||||||
| Legal & Professional-Other ***** |
50,000.00 | 50,000.00 | ||||||
| Depreciation and Amortization |
24.00 | 264.00 | ||||||
| Rent Expense—Real Property |
1,500.00 | 15,834.69 | ||||||
| Lease Expense—Personal Property |
— | — | ||||||
| Insurance |
(73.89 | ) | 1,592.00 | |||||
| Real Property Taxes |
— | — | ||||||
| Telephone and Utilities |
— | 1,194.20 | ||||||
| IT Expenses |
— | 371.00 | ||||||
| Travel and Entertainment (Itemize) |
— | — | ||||||
| Parking & Mileage |
— | 1,320.75 | ||||||
| Miscellaneous Operating Expenses (Itemize) |
— | |||||||
| Stock registrar fees |
591.90 | 5,687.95 | ||||||
| Delaware & Calif filing fees & franchise tax |
— | 3,980.00 | ||||||
| Indentured Trustee Expenses |
— | 360.00 | ||||||
| SEC 8K fees |
844.00 | 9,963.00 | ||||||
| Relocation Expenses |
— | 1,605.88 | ||||||
| CSC fee for Delaware representation |
— | 356.00 | ||||||
| US Trustee fees accrued |
550.00 | 4,675.00 | ||||||
| Office Supplies |
— | 347.86 | ||||||
| Postage & Courier |
20.68 | 178.29 | ||||||
| Document Management |
— | 12,869.20 | ||||||
| Payroll Processing Fees |
80.67 | 774.17 | ||||||
| Total Operating Expenses |
186,271.60 | 1,113,466.87 | ||||||
| Net Gain/(Loss) from Operations |
(186,271.60 | ) | (1,113,466.87 | ) | ||||
Page 14 of 18
IX. PROFIT AND LOSS STATEMENT
(ACCRUAL BASIS ONLY)
| Current Month | Cumulative Post-Petition | |||||||
| Non-Operating Income: |
||||||||
| Interest Income |
||||||||
| Net Gain on Sale of Assets (Itemize) |
||||||||
| Other (Itemize) |
||||||||
| Total Non-Operating income |
— | — | ||||||
| Non-Operating Expenses: |
||||||||
| Interest Expense |
||||||||
| Legal and Professional (Itemize) |
||||||||
| Other (Itemize) |
||||||||
| Total Non-Operating Expenses |
— | — | ||||||
| NET INCOME/(LOSS) |
(186,271.60 | ) | (1,113,466.87 | ) | ||||
(Attach exhibit listing all itemizations required above)
Footnotes:
| * | Special counsel Manatt, Phelps & Phillips, LLP were paid pre-petition an initial retainer of $300,000. No Pre-petition fees and costs credited were used against the retainer. A $300,000 adjustment to Prepaid Legal Expense was made through Owners’ Equity. Costs and expenses incurred between the filing date and November-2010 were $229,440.12. |
| ** | Bankruptcy counsel Landau, Gottfried & Berger, LLP were paid pre-petition an initial retainer of $250,000. Pre-petition fees and costs credited against the retainer were $50,810.31 leaving a remaining retainer of $199,189.69 as of the filing date. A $199,189.69 adjustment to Prepaid Legal Expense was made through Owners’ Equity. Costs and fees from the filing date until August 2010 were $210,461.44 exhausting the remaining retainer. Pending court approval, $72,514.27 in fees for August through November have been incurred but not accrued. See footnote ** on Schedule X—Balance Sheet. |
| *** | June and July Professional fees totaling $40,000 for Delta Corps, Inc., hiring Donald Pelgrim as Chief Administrative Officer, were paid after approval for payment by the Bankruptcy court. September, October, and November professional fees of $60,000 for Carl McKinzie as Chief Executive Officer were incurred. $48,000 was paid after approval for payment by the Bankruptcy Court. |
| **** | Accounting & Auditing Professional fees in the amount of $13,356 for Hutchinson & Bloodgood, LLP were incurred and unpaid pending approval of the fee statement from Bankruptcy court. Hutchinson & Bloodgood is no longer providing services to the Debtor. |
| **** | Subsequent to the engagement of Hutchinson & Bloodgood, the Debtor engaged Crowe Horwath, LLP for assistance with various tax matters including a 2008 federal tax audit and the filing of the 2009 tax returns. Crowe Horwath’s engagement was approved by the court. However, no payment has been made. |
| **** | Accounting & Auditing Professional fees through November 2010 from Crowe Horwath in the amount of $251,539.75 were incurred and unpaid pending approval of the fee statement from Bankruptcy court. |
Page 15 of 18
X. BALANCE SHEET
(ACCRUAL BASIS ONLY)
| Current Month End | ||||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Unrestricted Cash |
3,915,456.82 | |||||||
| Restricted Cash |
||||||||
| Accounts Receivable (Itemized, see below)* |
124,600.00 | |||||||
| Inventory |
||||||||
| Notes Receivable |
||||||||
| Prepaid Expenses (Rent) |
1,500.00 | |||||||
| Prepaid Expense-Legal Special Counsel |
70,559.88 | |||||||
| Prepaid Expense-Legal Bankruptcy Counsel |
— | |||||||
| Prepaid Expense-Other Legal Counsel |
— | |||||||
| Other (Prepaid Payroll) |
10,820.67 | |||||||
| Total Current Assets |
4,122,937.37 | |||||||
| Property, Plant, and Equipment |
875.00 | |||||||
| Accumulated Depreciation/Depletion |
264.00 | |||||||
| Net Property, Plant, and Equipment |
611.00 | |||||||
| Other Assets (Net of Amortization): |
||||||||
| Due from Insiders |
||||||||
| Other (Rent Deposits) |
3,897.20 | |||||||
| Total Other Assets |
3,897.20 | |||||||
| TOTAL ASSETS |
4,127,445.57 | |||||||
| LIABILITIES |
||||||||
| Post-petition Liabilities: |
||||||||
| Accounts Payable (Itemized, see below)** |
30,471.15 | |||||||
| Taxes Payable—Delaware Franchise Tax 2010 |
3,125.00 | |||||||
| Notes Payable |
||||||||
| Professional fees |
||||||||
| Secured Debt |
||||||||
| Other (Itemize) |
||||||||
| Total Post-petition Liabilities |
33,596.15 | |||||||
| Pre-petition Liabilities: |
||||||||
| Secured Liabilities |
||||||||
| Priority Liabilities |
||||||||
| Unsecured Liabilities*** |
159,617,187.50 | |||||||
| Other (Itemized, see below)**** |
1,521.21 | |||||||
| Total Pre-petition Liabilities |
159,618,708.71 | |||||||
| TOTAL LIABILITIES |
159,652,304.86 | |||||||
| EQUITY: |
||||||||
| 1 Pre-petition Owners’ Equity (original amount) |
(155,177,680.00 | ) | ||||||
| 2 Direct Charges to Equity (Itemized, see below)***** |
766,287.58 | |||||||
| 3 Post-petition Profit/(Loss) |
(1,113,466.87 | ) | ||||||
| TOTAL EQUITY |
(155,524,859.29 | ) | ||||||
| TOTAL LIABILITIES & EQUITY |
4,127,445.57 | |||||||
Page 16 of 18
| * Itemization of Accounts Receivable: | ||||||||
| Delaware Franchise Tax Refund Due (prior years) |
124,600.00 | |||||||
| Total |
124,600.00 | |||||||
| ** Itemization of Post-Petition Liabilities: | ||||||||
| Landau, Gottfried, & Berger, LLP |
28,818.65 | |||||||
| Christopher Damore (Accounting Svcs-MOR Prep) |
552.50 | |||||||
| U.S. Quarterly Trustee Fees |
1,100.00 | |||||||
| subtotal |
30,471.15 | |||||||
| ** Not included in the above table are the following incured and unpaid amount that are pending Bankruptcy Court approval: | ||||||||
| Carl McKinzie (Chief Executive Officer) |
12,000.00 | |||||||
| Hutchinson & Bloodgood, LLP (accounting & auditing) |
13,356.00 | |||||||
| Crowe Horwath, LLP (accounting & audit) |
251,539.75 | |||||||
| Landau, Gottfried, & Berger, LLP |
72,514.27 | |||||||
| subtotal |
349,410.02 | |||||||
| *** Itemization of Pre-Petition Unsecured Liabilities | ||||||||
| Senior Debt Due 2015 |
53,429,687.56 | |||||||
| Senior Debt Due 2016 |
53,244,791.61 | |||||||
| Senior Debt Due 2017 |
52,942,708.33 | |||||||
| Total |
159,617,187.50 | |||||||
| **** Itemization of Pre-Petition Other Liabilities | ||||||||
| Nixon Peabody |
318.74 | |||||||
| Registrar & Transfer |
983.52 | |||||||
| DF King & Co |
218.95 | |||||||
| Total |
1,521.21 | |||||||
| ***** Itemization of Direct Charges to Equity | ||||||||
| Reduction in Delaware tax |
157,600.00 | |||||||
| Refund from Auditors |
110,883.44 | |||||||
| Legal Retainer—Manatt, Phelps & Phillips, LLP |
300,000.00 | |||||||
| Legal Retainer—Landau, Gottfried & Berger, LLP |
199,189.69 | |||||||
| Change in SEC Refund |
135.53 | |||||||
| Bills received and accrued after BK filing (see above) |
(1,521.21 | ) | ||||||
| Change in Opening Cash Balance |
0.04 | |||||||
| Change in New Oak receivable |
0.09 | |||||||
| Total |
766,287.58 | |||||||
| The prepaid retainer of $250,000 for Bankruptcy Counsel-Landau, Gottfried & Berger was adjusted downward $50,810.31 as the activity occurred pre-petition. As of the petition date, the prepaid legal retainer for Bankruptcy Counsel was $199,189.69. |
|
|||||||
Page 17 of 18
XI. QUESTIONNAIRE
| No | Yes | |||||||||
| 1. |
Has the debtor-in-possession made any payments on its pre-petition unsecured debt, except as have been authorized by the court? If “Yes”, explain below: | x | ||||||||
| No | Yes | |||||||||
| 2. |
Has the debtor-in-possession during this reporting period provided compensation or remuneration to any officers, directors, principals, or other insiders without appropriate authorization? If “Yes”, explain below: | x | ||||||||
| 3. |
State what progress was made during the reporting period toward filing a plan of reorganization: | |||||||||
| The Debtor has negotiated the terms of a liquidating chapter 11 plan with its principal creditor, Wilmington Trust Company as Trustee for the bulk of its debt. That plan was filed with the Court on October 1, 2010. On November 12, 2010, the Debtor filed its disclosure statement and a motion seeking an order of the Court approving the same and setting plan solicitation and confirmation procedures. That motion has been set for hearing on January 5, 2011. | ||||||||||
| 4. |
Describe potential future developments which may have a significant impact on the case: | |||||||||
| There is a potential refund of over $90 million relating to loss carrybacks from earlier tax years. The FDIC, in its capacity as Receiver for the Debtor’s bank subsidiary, has submitted a proof of claim which, among other things, claims that the FDIC is entitled to some or all of any such tax refund and may have other super priority claims. If the FDIC’s claim is successful, it will reduce or potentially eliminate any assets available for distribution to general unsecured creditors. The Debtor reserves its rights with respect to any such claims by the FDIC. | ||||||||||
| Debtor continues to investigate potential claims against third parties to determine potential for recovery. No Committee of Unsecured Creditors has been appointed in the case. However, the Debtor continues to work and communicate cooperatively with Wilmington Trust, its principal unsecured creditor, concerning all aspects of the case. | ||||||||||
| 5. |
Attach copies of all Orders granting relief from the automatic stay that were entered during the reporting period. | |||||||||
| None | ||||||||||
| No | Yes | |||||||||
| 6. |
Did you receive any exempt income this month, which is not set forth in the operating report? If “Yes”, please set forth the amounts and sources of the income below. | x | ||||||||
|
|
||||||||||
| I, Carl W. McKinzie, Chief Executive Officer, | ||||||||||
| declare under penalty of perjury that I have fully read and understood the foregoing debtor-in-possession operating report and that the information contained herein is true and complete to the best of my knowledge. | ||||||||||
| /s/ Carl W. McKinzie |
Dated: 12/15/2010 | |||||
| Carl W. McKinzie | ||||||
| Chief Executive Officer |
Page 18 of 18