EX-99.7 9 d92045ex99-7.txt MONTHLY OPERATING REPORT FOR KEVCO MANUFACTURING EXHIBIT 99.7 CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS CASE NUMBER: 401-40784-BJH-11 JUDGE: BARBARA J. HOUSER UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS -------- ----- FORT WORTH DIVISION ---------- MONTHLY OPERATING REPORT MONTH ENDING: JULY 31, 2001 ------------- IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING REPORT (ACCRUAL BASIS - 1 THROUGH ACCRUAL BASIS - 7) AND THE ACCOMPANYING ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY): IS BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE. RESPONSIBLE PARTY: /s/ Wilford W. Simpson TREASURER --------------------------------------- ---------------------------- Original Signature of Responsible Party Title WILFORD W. SIMPSON SEPTEMBER 24, 2001 --------------------------------------- ---------------------------- Printed Name of Responsible Party Date PREPARER: /s/ Dennis S. Faulkner DEBTOR'S ACCOUNTANT --------------------------------------- ---------------------------- Original Signature of Preparer Title DENNIS S. FAULKNER SEPTEMBER 24, 2001 --------------------------------------- ---------------------------- Printed Name of Preparer Date CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 1 CASE NUMBER: 401-40784-BJH-11 COMPARATIVE BALANCE SHEET
SCHEDULED MONTH ASSETS AMOUNT JUL-01 MONTH MONTH ------ --------- ------ ----- ----- 1. Unrestricted Cash (FOOTNOTE) 41,683 153,739 2. Restricted Cash 3. Total Cash 41,683 153,739 4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 0 5. Inventory (FOOTNOTE) 14,793,828 0 6. Notes Receivable 7. Prepaid Expenses 196,584 0 8. Other (Attach List) 0 0 9. Total Current Assets 23,006,791 153,739 10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 2,220,574 11. Less: Accumulated Depreciation (7,696,543) (250,320) 12. Net Property, Plant & Equipment 24,385,644 1,970,254 13. Due From Insiders 14. Other Assets - Net of Amortization (Attach List) 8,369,096 0 15. Other (Attach List) 13,541,943 45,814,902 16. Total Assets 69,303,474 47,938,895 POST PETITION LIABILITIES 17. Accounts Payable 18. Taxes Payable (FOOTNOTE) 26,492 19. Notes Payable 20. Professional Fees 21. Secured Debt 22. Other (Attach List) 131,387 23. Total Post Petition Liabilities 157,879 PRE PETITION LIABILITIES 24. Secured Debt (FOOTNOTE) 75,885,064 15,071,491 25. Priority Debt (FOOTNOTE) 1,383,756 26. Unsecured Debt (FOOTNOTE) 5,139,545 2,883,206 27. Other (Attach List) 197,008,999 197,951,008 28. Total Pre Petition Liabilities 279,417,364 215,905,705 29. Total Liabilities 279,417,364 216,063,584 EQUITY 30. Pre Petition Owners' Equity (210,107,292) 31. Post Petition Cumulative Profit Or (Loss) (18,705,507) 32. Direct Charges To Equity (Attach Explanation FOOTNOTE) 60,688,110 33. Total Equity (168,124,689) 34. Total Liabilities and Equity 47,938,895
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 1 COMPARATIVE BALANCE SHEET
SCHEDULED MONTH ASSETS AMOUNT JUL-01 MONTH MONTH ------ --------- ------ ----- ----- A. 0 B. C. D. E. TOTAL OTHER ASSETS - LINE 8 0 0 A. Goodwill: Consolidated Forest Products (FOOTNOTE) 8,369,096 B. C. D. E. TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 8,369,096 0 A. Intercompany Receivables (FOOTNOTE) 13,541,943 45,814,902 B. C. D. E. TOTAL OTHER ASSETS - LINE 15 13,541,943 45,814,902 POST PETITION LIABILITIES A. Accrued Liabilities (FOOTNOTE) 131,387 B. C. D. E. TOTAL OTHER POST PETITION LIABILITIES - LINE 22 131,387 PRE PETITION LIABILITIES A. Interco. Payables (FOOTNOTE) 68,508,999 69,451,008 B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000 C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000 D. E. TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 197,008,999 197,951,008
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2 CASE NUMBER: 401-40784-BJH-11 INCOME STATEMENT
MONTH QUARTER REVENUES JUL-01 MONTH MONTH TOTAL -------- ------ ----- ----- ------- 1. Gross Revenues 0 0 2. Less: Returns & Discounts 0 3. Net Revenue 0 0 COST OF GOODS SOLD 4. Material 0 5. Direct Labor 0 6. Direct Overhead (393) (393) 7. Total Cost of Goods Sold (393) (393) 8. Gross Profit 393 393 OPERATING EXPENSES 9. Officer / Insider Compensation 40,500 40,500 10. Selling & Marketing 0 11. General & Administrative 2,320 2,320 12. Rent & Lease 0 0 13. Other (Attach List) 16,267 16,267 14. Total Operating Expenses 59,087 59,087 15. Income Before Non-Operating Income & Expense (58,694) (58,694) OTHER INCOME & EXPENSES 16. Non-Operating (Income) (Att List) (197,204) (197,204) 17. Non-Operating Expense (Att List) 0 0 18. Interest Expense 0 19. Depreciation / Depletion 0 20. Amortization 0 21. Other (Attach List) 0 22. Net Other Income & (Expenses) 197,204 197,204 REORGANIZATION EXPENSES 23. Professional Fees 0 24. U.S. Trustee Fees 0 25. Other (Attach List) 0 26. Total Reorganization Expenses 0 0 27. Income Tax 0 28. Net Profit (Loss) 138,510 138,510
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 2 INCOME STATEMENT
MONTH QUARTER OPERATING EXPENSES JUL-01 MONTH MONTH TOTAL ------------------ ------ ----- ----- ------- A. Payroll & Employee Benefits 11,684 11,684 B. Insurance Expense 278 278 C. Utilities and Telephone 2,248 2,248 D. Taxes 2,057 2,057 E. 0 TOTAL OTHER OPERATING EXPENSES - LINE 13 16,267 16,267 OTHER INCOME & EXPENSES A. Income Statement Adjustments (FOOTNOTE) (197,204) (197,204) B. 0 C. TOTAL NON-OPERATING INCOME - LINE 16 (197,204) (197,204) A. 0 B. 0 C. 0 D. TOTAL NON-OPERATING EXPENSE - LINE 17 0 0 REORGANIZATION EXPENSES A. 0 B. 0 C. 0 D. 0 E. 0 TOTAL OTHER REORGANIZATION EXPENSES - LINE 25 0 0
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 3 CASE NUMBER: 401-40784-BJH-11
CASH RECEIPTS AND MONTH QUARTER DISBURSEMENTS JULY-01 MONTH MONTH TOTAL ----------------- ------- ----- ----- ------- 1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE RECEIPTS FROM OPERATIONS 2. Cash Sales COLLECTION OF ACCOUNTS RECEIVABLE 3. Pre Petition 4. Post Petition 5. Total Operating Receipts NON-OPERATING RECEIPTS 6. Loans & Advances (Attach List) 7. Sale of Assets 8. Other (Attach List) 9. Total Non-Operating Receipts 10. Total Receipts 11. Total Cash Available OPERATING DISBURSEMENTS 12. Net Payroll 13. Payroll Taxes Paid 14. Sales, Use & Other Taxes Paid 15. Secured / Rental / Leases 16. Utilities 17. Insurance 18. Inventory Purchases 19. Vehicle Expenses 20. Travel 21. Entertainment 22. Repairs & Maintenance 23. Supplies 24. Advertising 25. Other (Attach List) 26. Total Operating Disbursements REORGANIZATION DISBURSEMENTS 27. Professional Fees 28. U.S. Trustee Fees 29. Other (Attach List) 30. Total Reorganization Expenses 31. Total Disbursements 32. Net Cash Flow 33. Cash - End of Month
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING LP SUPPLEMENT TO ACCRUAL BASIS - 3 JULY, 2001 CASE NUMBER: 401-40784-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL -------- -------- ---------- -------- --------- ---------- ---------- 1 CASH-BEGINNING OF MONTH -- 3,739 5,395,155 4,631 5,668 1,000 5,410,193 RECEIPTS FROM OPERATIONS 2 CASH SALES -- -- -- COLLECTION OF ACCOUNTS RECEIVABLE 3 PRE PETITION -- -- -- 4 POST PETITION 47,759 -- 47,759 5 TOTAL OPERATING RECEIPTS 47,759 -- -- -- -- -- 47,759 NON OPERATING RECEIPTS 6 LOANS & ADVANCES -- -- 7 SALE OF ASSETS 482,442 55,779 68,000 606,221 8 OTHER -- 50,449 95,885 -- -- -- 146,334 INTERCOMPANY TRANSFERS 88,194 121,941 (210,135) -- -- -- SALE EXPENSE REIMBURSEMENT LIFE INSURANCE CASH VALUE RENT PAYROLL TAX ADVANCE RETURNED 43,264 MISC. 43,707 -- INTEREST INCOME 8,914 9 TOTAL NON OPERATING RECEIPTS 570,636 228,169 (46,250) -- -- -- 752,555 10 TOTAL RECEIPTS 618,395 228,169 (46,250) -- -- -- 800,314 11 CASH AVAILABLE 618,395 231,908 5,348,905 4,631 5,668 1,000 6,210,507 OPERATING DISBURSEMENTS 12 NET PAYROLL 342,427 9,430 282,924 634,781 13 PAYROLL TAXES PAID -- 238,878 238,878 14 SALES, USE & OTHER TAXES PAID -- -- 15 SECURED/RENTAL/LEASES 15,069 3,223 40,094 58,386 16 UTILITIES 67,481 3,641 13,097 84,219 17 INSURANCE -- 137,376 137,376 18 INVENTORY PURCHASES -- -- 19 VEHICLE EXPENSE -- -- 20 TRAVEL 4,264 -- 4,264 21 ENTERTAINMENT -- -- 22 REPAIRS & MAINTENANCE 2,954 74 5,492 8,520 23 SUPPLIES 3,873 -- 30,637 34,510 24 ADVERTISING -- 25 OTHER 182,327 61,801 183,730 -- -- -- 427,858 LOAN PAYMENTS 55,779 55,779 FREIGHT 14,204 3,126 17,330 CONTRACT LABOR 846 -- 45,359 46,205 401 K PAYMENTS -- -- PAYROLL TAX ADVANCE ADP -- WAGE GARNISHMENTS 1,761 1,761 MISC. 167,277 2,896 136,610 306,783 26 TOTAL OPERATING DISBURSEMENTS 618,395 78,169 932,228 -- -- -- 1,628,792 REORGANIZATION DISBURSEMENTS 27 PROFESSIONAL FEES -- 157,275 157,275 28 US TRUSTEE FEES -- -- 29 OTHER -- 30 TOTAL REORGANIZATION EXPENSE -- -- 157,275 -- -- -- 157,275 31 TOTAL DISBURSEMENTS 618,395 78,169 1,089,503 -- -- -- 1,786,067 32 NET CASH FLOW -- 150,000 (1,135,753) -- -- -- (985,753) 33 CASH - END OF MONTH -- 153,739 4,259,402 4,631 5,668 1,000 4,424,440
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 4 CASE NUMBER: 401-40784-BJH-11
SCHEDULED MONTH ACCOUNTS RECEIVABLE AGING AMOUNT JUL-01 MONTH MONTH ------------------------- --------- ------ ------ ------ 1. 0 - 30 0 2. 31 - 60 3. 61 - 90 4. 91 + 5. Total Accounts Receivable 7,974,696 0 6. (Amount Considered Uncollectible) 7. Accounts Receivable (Net) 7,974,696 0
AGING OF POST PETITION MONTH: JULY-01 TAXES AND PAYABLES ----------
0 - 30 31 - 60 61 - 90 91 + TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL ------------- ------ ------- ------- ---- ----- 1. Federal -- 2. State 5,000 5,000 3. Local -- 4. Other (See Below) 21,492 21,492 5. Total Taxes Payable 26,492 -- -- -- 26,492 6. Accounts Payable -- -- --
MONTH: JULY-01 ---------- STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT WITHHELD ENDING TAX FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY ------- ------------- --------------- ------------- ---------- 1. Withholding ** 1,254 (1,254) 0 2. FICA - Employee ** 885 (885) 0 3. FICA - Employer ** 885 (885) 0 4. Unemployment 0 0 5. Income 0 6. Other (Attach List) 0 7. Total Federal Taxes 0 3,024 (3,024) 0 STATE AND LOCAL 8. Withholding 0 0 9. Sales (FOOTNOTE) 5,000 0 5,000 10. Excise 0 11. Unemployment 0 0 12. Real Property 0 13. Personal Property (FOOTNOTE) 21,492 0 21,492 14. Other (Attach List) 0 15. Total State And Local 26,492 0 0 26,492 16. Total Taxes 26,492 3,024 (3,024) 26,492
* The beginning tax liability should represent the liability from the prior month or, if this is the first operating report, the amount should be zero. ** Attach photocopies of IRS Form 6123 or your FTD coupon and payment receipt to verify payment of deposit. This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 5 CASE NUMBER: 401-40784-BJH-11 The debtor in possession must complete the reconciliation below for each bank account, including all general, payroll and tax accounts, as well as all savings and investment accounts, money market accounts, certificates of deposit, government obligations, MONTH: JULY-01 -----------
BANK RECONCILIATIONS Account # 1 Account # 2 -------------------- ------------ ------------ A. BANK: Bank of America GWJones Exch Bank Other Accounts TOTAL B. ACCOUNT NUMBER: 3751764595 0005006226 (Attach List) C. PURPOSE (TYPE): DIP Disbursement-BB DIP Disbursement-DF 1. Balance Per Bank Statement 6,137 3,671 -- 9,808 2. Add: Total Deposits Not Credited -- -- -- 3. Subtract: Outstanding Checks (777) (244) -- (1,021) 4. Other Reconciling Items (5,057) 9 150,000 144,952 5. Month End Balance Per Books 303 3,436 150,000 153,739 6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
BANK, ACCOUNT NAME & NUMBER DATE OF PURCHASE TYPE OF INSTRUMENT PURCHASE PRICE CURRENT VALUE --------------------------- ---------------- ------------------ -------------- ------------- 7. 8. 9. 10. (Attach List) 11. Total Investments CASH 12. Currency On Hand -- Reclass to Accounts Payable 13. Total Cash - End of Month 153,739
This form does x does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 5 MONTH: JULY-01 ---------------
BANK RECONCILIATIONS Account # 3 Account # 4 Account # 5 -------------------- ----------- ----------- ----------- A. BANK: Summit Bank Summit Bank TOTAL B. ACCOUNT NUMBER: 1-0138099 1-0137836 OTHER BANK C. PURPOSE (TYPE): Depository Depository ACCOUNTS 1. Balance Per Bank Statement 0 2. Add: Total Deposits Not Credited 0 3. Subtract: Outstanding Checks 0 4. Other Reconciling Items 5,000 145,000 150,000 5. Month End Balance Per Books 5,000 145,000 150,000 6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
BANK, ACCOUNT NAME & NUMBER DATE OF PURCHASE TYPE OF INSTRUMENT PURCHASE PRICE CURRENT VALUE --------------------------- ---------------- ------------------ -------------- ------------- A. B. C. D. TOTAL OTHER INVESTMENT ACCOUNTS - LINE 10 0 0
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 6 CASE NUMBER: 401-40784-BJH-11 MONTH: JULY-01 ----------- PAYMENTS TO INSIDERS AND PROFESSIONALS Of the Total Disbursements shown for the month, list the amount paid to Insiders (as defined in Section 101 (31) (A) - (F) of the U.S. Bankruptcy Code) and to Professionals. Also, for payments to Insiders, identify the type of compensation paid (e.g. salary, bonus, commissions, insurance, housing allowance, travel, car allowance, etc.). Attach additional sheets if necessary. INSIDERS
TYPE OF AMOUNT TOTAL PAID NAME PAYMENT PAID TO DATE ---- ------- ------ ---------- 1. Lee Denham Payroll/severance 134,620 2. Lee Denham Expense Reimb. 254 3. Jim Connors Consulting fees and expenses 9,000 102,897 4. Jim Connors Duo-Form Sale Bonus 31,500 31,500 5. (Attach List) 6. Total Payments To Insiders 40,500 269,271
PROFESSIONALS
DATE OF COURT ORDER TOTAL AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE $ UNPAID* ---- ----------- -------- ------ ---------- --------- 1. Gordion Group 03/20/01 301,398 301,398 -- 2. 3. 4. 5. (Attach List) 6. Total Payments To Professionals 301,398 -- 301,398 --
* Include all fees incurred, both approved and unapproved POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE PROTECTION PAYMENTS
SCHEDULED AMOUNTS TOTAL MONTHLY PAID UNPAID PAYMENTS DURING POST NAME OF CREDITOR DUE MONTH PETITION ---------------- --------- ------- -------- 1. Bank of America N/A $ 15,071,491 2. Status of Leases Payable (FOOTNOTE) Unknown 3. 4. 5. (Attach List) 6. TOTAL $ -- $ -- $ 15,071,491
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 7 CASE NUMBER: 401-40784-BJH-11 MONTH: JULY-01 ------------ QUESTIONNAIRE
YES NO --- -- 1. Have any Assets been sold or transferred outside the normal course of X business this reporting period? 2. Have any funds been disbursed from any account other than a debtor in possession account? X 3. Are any Post Petition Receivables (accounts, notes, or loans) due from related parties? X 4. Have any payments been made on Pre Petition Liabilities this reporting period? X 5. Have any Post Petition Loans been received by the debtor from any party? X 6. Are any Post Petition Payroll Taxes past due? X 7. Are any Post Petition State or Federal Income Taxes past due? X 8. Are any Post Petition Real Estate Taxes past due? X 9. Are any other Post Petition Taxes past due? X 10. Are any amounts owed to Post Petition creditors delinquent? X 11. Have any Pre Petition Taxes been paid during the reporting period? X 12. Are any wage payments past due? X
If the answer to any of the above questions is "Yes", provide a detailed explanation of each item. Attach additional sheets if necessary. SEE FOOTNOTE INSURANCE
YES NO --- -- 1. Are Worker's Compensation, General Liability and other necessary insurance coverages in effect? X 2. Are all premium payments paid current? X 3. Please itemize policies below.
If the answer to any of the above questions is "No", or if any policies have been canceled or not renewed during this reporting period, provide an explanation below. Attach additional sheets if necessary. INSTALLMENT PAYMENTS
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY -------------- ------- -------------- -------------------------- Property Lexington, Allianz 5/29/00-3/1/02 Semi-Annual $ 26,485 Group Health Blue Cross/Blue Shield Terminated 8/1/01 N/A Auto Liberty Mutual 9/1/00-3/1/02 Semi-Annual 3,333 General Liability Liberty Mutual 9/1/00-3/1/02 Semi-Annual 64,657
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANUFACTURING, LP FOOTNOTES SUPPLEMENT CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS MONTH: JULY 31, 2001 ---------------
DUAL BASIS FORM NUMBER LINE NUMBER FOOTNOTE/EXPLANATION ------ ----------- -------------------- 1 1 Pursuant to the February 12, 2001 Order (1) Authorizing 3 1 Continued Use of Existing Forms and Records; (2) Authorizing Maintenance of Existing Corporate Bank Accounts and Cash Management System; and (3) Extending Time to Comply with 11 U.S.C. Section 345 Investment Guidelines, funds in the Bank of America and Key Bank deposit accounts are swept daily into Kevco's lead account number 1295026976. The Bank of America lead account is administered by, and held in the name of, Kevco Management Co. (co-debtor, Case No. 401-40788-BJH-11). Accordingly, all cash receipts and disbursements flow through Kevco Management's Bank of America DIP account. A schedule allocating receipts and disbursements among Kevco, Inc. and its subsidiaries is included in this report as a Supplement to Accrual Basis -3. Debtor maintains two small petty cash accounts that are included in the cash supplement schedule. 1 4,5 Pursuant to Asset Purchase Agreements approved by the Court 1 10,14 (see prior Monthly Operating Reports for details), the Kevco 1 24 Debtors have sold most of their assets except for certain 1 26 items of real property currently being marketed. 1 15A Intercompany receivables/payables are from/to co-debtors 1 27A Kevco Management Co. (Case No. 401-40788-BJH-11), Kevco 7 3 Distribution, LP (Case No. 401-40789-BJH-11), Kevco Holding, Inc. (Case No. 401-40785-BJH-11), DCM Delaware, Inc. (Case No. 401-40787-BJH-11), Kevco GP, Inc. (Case No. 401-40786-BJH-11), Kevco Components, Inc. (Case No. 401-40790-BJH-11), and Kevco, Inc. (Case No. 401-40783-BJH-11). 1 18 Sales and property tax owing are accruals only and not yet 4 9, 13 due. 1 22A The Debtor records on its books accruals for certain liabilities based on historical estimates. While the known creditors were listed on the Debtor's Schedules, the estimated amounts were not. Accordingly, for purposes of this report, the accrued liabilities are reflected as post-petition "Accrued Liabilities." 1 25 Pursuant to Order dated February 12, 2001 and Supplemental Order dated March 14, 2001, debtors were authorized to pay pre-petition taxes, salaries and wages up to a maximum of $4,300 per employee. Debtors were also (a) allowed to pay accrued vacation to terminated employees and (b) permitted to continue allowing employees to use vacation time as scheduled. 1 32 The direct charges to equity are due to secured debt reductions pursuant to asset sales by Debtor and its co-debtors as well as direct cash payments of $25 million. The secured debt owed to Bank of America by Kevco, Inc. (Case No. 401-40783-BJH-11) has been guaranteed by all of its co-debtors (see Footnote 1,27A); therefore, the secured debt is reflected as a liability on all of the Kevco entities. The charge to equity is simply an adjustment to the balance sheet. 2 16A During July, expense accruals made at the beginning of the year were reversed because the liabilities will not be incurred as estimated. These Income Statement adjustments were made in order to more accurately reflect Debtor's assets and liabilities. 6 2 The Debtor is the lessee on hundreds of real and personal property leases, the vast majority of which have been rejected. The Debtor does not isolate monthly payments due or paid on account of such leases. Instead, all lease payments are reflected in the Debtor's accounts payable system. To separately identify monthly accruals and payments on leases would require an enormous outlay of the Debtor's accounting personnel and professionals. The Debtor simply does not have available to it the resources that would be required to provide the detail requested. If any party-in-interest desires specific information about any specific lease, the Debtor will provide such information upon request.