NOTE 21—DEBTOR-IN-POSSESSION FINANCIAL INFORMATION

The following table presents the statement of operations for Fremont, while a debtor-in-possession, for the period indicated:


(Dollars in thousands)	Period From January 1, 2010 Through June 11,
(Debtor-in-possession from June 18, 2008 through June 11, 2010)	2010
Revenues:
Interest	$	13

Total revenues		13

Expenses:
Professional		1,208
Interest		2,102
Compensation		572
Insurance		1,711
Litigation		250
Other		280

Total expenses		6,123

Other income (expense):
Changes in fair value of assets held in trust for deferred compensation plans		(17	)
Other income		385

Total other income		368

Loss before reorganization items, losses of subsidiaries and income taxes		(5,742	)
Reorganization items, net		10,050

Loss before losses of subsidiaries and income taxes		(15,792	)
Undistributed losses of subsidiaries		(6,651	)

Loss before income taxes		(22,443	)
Income tax expense		498

Net loss	$	(22,941	)

The following table presents the statement of cash flows for Fremont, while a debtor-in-possession, for the period indicated:


(Dollars in thousands)	Period From January 1, 2010 Through June 11,
(Debtor-in-possession from June 18, 2008 through June 11, 2010)	2010
Cash flows from operating activities:
Net loss	$	(22,941	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2
Chinges in fair value in deferred compensation plans		57
Gain on extinguishment of debt—TOPrS		(3,530	)
Senior debt claims paid		(183,267	)
TOPrS claims paid		(45,000	)
Deferred compensation claims paid		(11,896	)
Changes in operating assets and liabilities:
Other assets		(1,317	)
Other liabilities		(34,963	)
Investment in subsidiaries		286,978
Income taxes receivable (payable)		1,221

Net cash used in operating activities		(14,656	)

Cash flows from investing activities		—

Cash flows from financing activities:
Issuance of common shares and warrants		10,060

Net cash provided by financing activities		10,060

Decrease in cash and cash equivalents		(4,596	)
Cash and cash equivalents, beginning of period		23,742

Cash and cash equivalents, end of period	$	19,146

Reorganization items, net

Expenses directly attributable to Fremont’s bankruptcy proceedings, including, but not limited to, professional fees and similar types of expenses incurred directly related to the bankruptcy filings, gains and losses resulting from activities of the reorganization process and interest income earned on cash accumulated by the Company while in bankruptcy are presented separately from other operating expenses in the consolidated statements of operations as reorganization items, net. Reorganization items, net, within continuing operations, consisted of the following for the periods indicated:


	Year Ended December 31,
(Dollars in thousands)	2011		2010
Legal and professional fees	$	1,540	$	13,948
Senior Notes settlement (1)		—		1,500
Interest income		—		(50	)
Gain on extinguishment of debt (2)		—		(3,530	)

Reorganization items, net	$	1,540	$	11,868

(1)	On the Effective Date, the Senior Notes were cancelled, and the holders of the Senior Notes received the outstanding principal balance of $166.5 million, $18.7 million in accrued and unpaid interest, plus an additional $1.5 million.

(2)

On the Effective Date, as partial settlement of the TOPrS’ bankruptcy claims, the former holders of the TOPrS received $45.0 million in cash, 21.0 million shares of the Company’s common stock, and were issued an aggregate of $39.0 million of notes payable, due 2016. As a result of this settlement, the Company recognized a $3.5 million gain, included in reorganization items, net in the accompanying consolidated statements of operations, based on the difference between the carrying amount of the TOPrS and settlement amounts.