EX-99.2 4 h94494ex99-2.txt MONTHLY OPERATING REPORT - STERLING CHEMICALS INC EXHIBIT 99.2 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION CASE NAME: STERLING CHEMICALS, INC. PETITION DATE: 07/16/01 CASE NUMBER: 01-37806-H4-11 MONTHLY OPERATING REPORT SUMMARY FOR MONTH: JANUARY YEAR: 2002
MONTH 7/16/01-8/31/01 9/30/01 10/31/01 11/30/01 12/31/01 1/31/02 ------------------------------------------------------------------------------------------------------------------------------------ REVENUES (MOR-6) $ 36,458,061 $ 23,943,367 $ 21,691,268 $ 21,898,981 $ 18,571,799 $ 20,053,870 INCOME BEFORE INT. DEPREC./TAX (MOR-6) $ (5,663,895) $ (6,254,090) $ (1,550,037) $ (4,402,886) $ (1,583,651) $ (2,798,067) NET INCOME (LOSS) (MOR-6) $ (12,537,900) $ (10,767,435) $ (5,850,757) $ (8,543,837) $ (5,648,707) $ (7,180,158) PAYMENTS TO INSIDERS (MOR-9) $ 173,179 $ 188,763 $ 156,110 $ 106,743 $ 204,995 $ 142,597 PAYMENTS TO PROFESSIONALS (MOR-9) $ -- $ 11,243 $ 1,408,481 $ 802,884 $ 683,788 $ 1,238,773 TOTAL DISBURSEMENTS (MOR-7) $ 98,519,611 $ 60,972,958 $ 72,465,946 $ 64,901,653 $ 62,720,965 $ 65,092,860
***The original of this document MUST BE FILED with the United States Bankruptcy Court and a COPY MUST BE SENT to the United States Trustee*** REQUIRED INSURANCE MAINTAINED AS OF SIGNATURE DATE EXP. See attachment 2 DATE ----------------------------- CASUALTY YES (x) NO ( ) 08 - 01 - 02 LIABILITY YES (x) NO ( ) 07 - 01 - 02 VEHICLE YES (x) NO ( ) 07 - 01 - 02 WORKER'S YES (x) NO ( ) 07 - 01 - 02 OTHER YES (x) NO ( ) various ATTORNEY NAME: Jeff Spiers FIRM: Andrews & Kurth LLP ADDRESS: 600 Travis ADDRESS: Suite 4200 CITY, STATE ZIP: Houston, TX 77002 TELEPHONE: 713-220-4103 Are all accounts receivable being collected within terms? NO Are all post-petition liabilities, including taxes, being paid with terms? YES Have any pre-petition liabilities been paid? NO If so, describe -------------------------------------------------------------------------------- Are all funds received being deposited into DIP bank accounts? YES Were any assets disposed of outside the normal course of business? NO If so, describe ---------------------------------------------------- Are all U.S. Trustee Quarterly Fee Payments current? YES What is the status of your Plan of Reorganization? A Plan of Reorganization is currently being developed. -------------------------------------------------------------------------------- I certify under penalty of perjury that the following complete Monthly Operating Report (MOR), consisting of MOR-1 through MOR-9 plus attachments, is true and correct. SIGNED /s/ PAUL VANDERHOVEN --------------------------------------------------- (ORIGINAL SIGNATURE) TITLE VP Finance, CFO --------------------------------------------------- MOR-1 CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-37806-H4-11
PAID COVERAGE POLICY PERIOD POLICY NO. LIMITS CARRIER THROUGH ------------------------------------------------------------------------------------------------------------------------------------ See Attachment 2
MOR-1 ATTACHMENT 2 Page 2 of 13 2/19/02 SUMMARY OF COVERAGES FOR STERLING CHEMICALS HOLDINGS, INC.
NO. TYPE OF INSURANCE AMOUNTS/LIMITS INSURANCE CO. TERM EXPIRE EXPOSURE BASE --- ----------------- -------------- ------------- ---- ------ ------------- 1 Workers Compensation Statutory - $1,000,000 Employers American Guar. 1 year 7/1/02 Total annual Liability. Zurich US remuneration Ded. $250,000 per accident. 2 Automobile Liability $2,000,000 ea. occurrence. American Guar. 1 year 7/1/02 Number of vehicles Ded. $25,000 per occurrence. Zurich Amer. owned and leased 3 Excess Liability $5,000,000 ea. occurrence and Primex, Ltd 1 year 7/1/02 Annual revenues and Excess to $1 Million SIR aggregate. Excess $1,000,000 GL remuneration $2,000,000 AL. 4 Excess Liability $20,000,000 ea. loss and Primex, Ltd. 1 year 7/1/02 Included aggregate. (Reinsured through AIG.) 5 Excess Liability $50,000,000 ea. loss and Gerling Global 1 year 7/1/02 Flat charge - based aggregate. on exposures and risk potential 6 Excess Liability $100,000,000 ea. loss and Lloyd's 1 year 7/1/02 Flat charge - based aggregate. Lore on exposures and 7 Excess Liability $50,000,000 Zurich 1 year 7/1/02 Flat charge 8 Excess Liability $50,000,000 AIG 1 year 7/1/02 Flat Charge 9 Excess Liability $50,000,000 Starr Excess 1 year 7/1/02 Flat Charge 10 Marine Terminal $50,000,000 ea. occurrence. New Hampshire Ins. 1 year 7/1/02 Based on volume Operators Liability and Ded. $25,000 per occurrence Co. thru Marsh throughput and no. Charterer's Legal $100,000 pollution London chartered vessels. Liability per occurrence. 11 Excess Marine Liability $24,000,000 excess of MTO, CLL, XL Specialty 1 year 7/1/02 Volume thru put & P&L Brockbank & vessels docked. Liberty Und. 12 Excess Marine Liability $25,000,000 excess $24,000,000 XL Specialty 1 year 7/1/02 Flat Brockbank & N.Y. Marine Gen. Ins. NO. TYPE OF INSURANCE ANNUAL PREMIUM --- ----------------- -------------- 1 Workers Compensation $195,653 - Audit at (AFCO) expiration. Plus all losses within deductible. 2 Automobile Liability $92,955 (AFCO) 3 Excess Liability $451,090 Annual - Half on 7/1/01; Excess to $1 Million SIR 1/2 on 1/1/02. 4 Excess Liability Included 5 Excess Liability $295,000 6 Excess Liability $241,886 7 Excess Liability $109,210 8 Excess Liability $80,938 9 Excess Liability $62,500 10 Marine Terminal $27,000 (AFCO) Min. premium & deposit. Operators Liability and Charterer's Legal Liability 11 Excess Marine Liability $57,375 12 Excess Marine Liability $21,250
Page 3 of 13 2/19/02
NO. TYPE OF INSURANCE AMOUNTS/LIMITS INSURANCE CO. TERM EXPIRE EXPOSURE BASE --- ----------------- -------------- ------------- ---- ------ ------------- 13 Property Damage, $ Total insured values combined Munich Re: et. al. 1 year 8/1/02 Property Values - PD Business Interruption all-risk. Sublimits: Flood - Income values - BI and Boiler & Machinery $100 mil., Earthquake - $100 PML, fire protection mil., $10 mil extra expense. available; many Ded.: Petrochem $1,000,000 PD, other factors. 10 day - BI. Pulp & Fibers - $1 mil. PD/BI. 14 Directors & Officers $15,000,000 each loss and each National Union 1 year 8/21/02 Various Liability policy year. Ded. $1,000,000 Indemnity Corp. Reimb. 15 Excess Directors & $10,000,000 excess of Primary D&O Hartford 1 year 8/21/02 Various Officers Liability 16 Directors & Officers $10,000,000 XL Specialty Ins. 1 year 8/21/02 Various Liability Co. 17 Employee Dishonesty & $5,000,000 each Insuring Texas Pacific 1 year 10/1/02 Various Depositor's Forgery Agreement. Ded. $50,000. Chubb 18 Hull & Machinery and Barge Hull Value Zurich-American 1 year 7/1/02 Hull & Machinery Protection & Indemnity (M-25 = $1,500,000) Insurance Co. values Ded. $5,000 per loss. $1,000,000 P&I 19 Pollution Insurance Section A - $250,000 Water Quality 1 year 7/1/02 Hull gross Section B - $5,000,000 Insurance Syndicate registered tonnage CERCLA - $5,000,000 20 Marine and Railroad Cargo $12,000,000 any one vessel Mutual Marine 1 year Continuing Declared shipment $1,000,000 any one barge values $1,000,000 any one rail ship. $100,000 any one truck 21 Duty Drawback Bond $1,000,000 Washington 1 year Continuing Limit International 22 Fiduciary $10,000,000 National Union 1 year 8/21/02 Various Ded. $250,000 per occurrence 23 Environmental Impairment $4,000,000 per loss ECS 1 year 1/15/02 Loss Potential Liability (Petrochem & $8,000,000 aggregate (Indian Harbor) Fibers) 24 Closure/Post Closure $1,995,222 Combined Underwriters 1 year Continuous Estimated Bonds - Petrochem Indemnity Closure/Post Closure Costs NO. TYPE OF INSURANCE ANNUAL PREMIUM --- ----------------- -------------- 13 Property Damage, Annual - Financed through AFCO. Business Interruption $4.0M (est.) and Boiler & Machinery 14 Directors & Officers $316,000 (15 mos.) Liability 15 Excess Directors & $223,700 (15 mos.) Officers Liability 16 Directors & Officers $115,000 (15 mos.) Liability 17 Employee Dishonesty & $14,450 Depositor's Forgery 18 Hull & Machinery and $29,378 (AFCO) Protection & Indemnity 19 Pollution Insurance $4,258 (AFCO) 20 Marine and Railroad Cargo $40,000 Annual Approx. 21 Duty Drawback Bond $2,875 22 Fiduciary $22,000 - Financed through Imperial. 23 Environmental Impairment $106,200 - Financed through AFCO. Liability (Petrochem & Fibers) 24 Closure/Post Closure $40,610 Bonds - Petrochem ANNUAL TOTAL: $3,459,260 *
* Total fluctuates due to cargo premiums dependence upon volume of CIF export shipments and annual audits of Worker's Compensation and Marine Terminal policies. STERLING CHEMICALS HOLDINGS, INC. (ALL DEBTORS) CONSOLIDATING BALANCE SHEET FOR THE PERIOD ENDED JANUARY 31, 2002 (In Thousands) (Unaudited)
-------------------------------------------------------------------------------------------- STERLING CHEMICALS STERLING CHEMICALS, STERLING CHEMICALS STERLING FIBERS HOLDINGS INC. INC. ENERGY, INC. INC. ASSETS 01-37805-H4-11 01-37806-H4-11 01-37807-H4-11 01-37808-H4-11 -------------------------------------------------------------------------------------------- Current Assets: Cash and cash equivalents $ 170 $ 1,984 $ - $ 124 Trade accounts receivable, net - 44,350 67 2,714 Other Receivables - 1,567 - 3,659 Due from affiliates 1,090 21,376 12,801 - Inventories - 33,468 - 8,636 Prepaid expenses 33 4,338 - 108 Deferred income tax benefit - - - - ------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 1,293 107,083 12,868 15,241 Property, plant and equipment, net - 123,619 3,074 6,120 Deferred income taxes - - - - Investments-Third Party - 1,500 6,165 - Investments in Subs 35,060 94,735 - - Other assets 865 35,805 - 1,331 ------------------------------------------------------------------------------------ TOTAL ASSETS $ 37,218 $ 362,742 $ 22,107 $ 22,692 ==================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Post Petition liabilities (MOR-4) - 142,108 1,702 5,638 Pre-Petition liabilities: Notes Payable - Secured * - 227,848 - 57,221 Secured Debt Accrued Interest * - 29,528 - 7,415 Unsecured debt 186,538 280,615 1,110 70,749 Other / Intercompany - 201,020 - - Deferred income taxes - - - - Common stock held by new ESOP - 254 - 35 Less: Unearned compensation - (458) - 458 Redeemable preferred stock 27,297 (15,794) - 15,794 STOCKHOLDERS' EQUITY: Common stock, $.01 par value - 75 1 - Additional paid-in capital (367,555) (235,013) - 7,874 Retained earnings-Filing Date 191,923 (212,503) 15,333 (137,929) Retained earnings-Post Filing Date (985) (49,001) 3,961 (4,563) Pension adjustment - (3,398) - - Accumulated translation adj. - - - - Deferred compensation - (2) - - ------------------------------------------------------------------------------------ (176,617) (499,842) 19,295 (134,618) Treasury stock at cost - (2,537) - - ------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY (176,617) (502,379) 19,295 (134,618) TOTAL LIABILITIES AND EQUITY $ 37,218 $ 362,742 $ 22,107 $ 22,692 ====================================================================================
------------------------------------------------------------------------------------------ STERLING CHEMICALS STERLING CANADA, STERLING PULP STERLING PULP INT'L, INC. INC. CHEMICALS US, INC. CHEMICALS, INC. ASSETS 01-37809-H4-11 01-37810-H4-11 01-37811-H4-11 01-37812-H4-11 ------------------------------------------------------------------------------------------ Current Assets: Cash and cash equivalents $ - $ - $ - $ 50 Trade accounts receivable, net - 2,274 914 4,531 Other Receivables - 4,371 - - Due from affiliates 2,967 51,814 666 6,590 Inventories - - 278 1,615 Prepaid expenses (283) - - - Deferred income tax benefit - - - - ----------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 2,684 58,459 1,858 12,786 Property, plant and equipment, net - - - 42,977 Deferred income taxes - - - - Investments-Third Party - - - - Investments in Subs - 296,023 1,804 - Other assets 2,662 5,284 - - ---------------------------------------------------------------------------------- TOTAL ASSETS $ 5,346 $ 359,766 $ 3,662 $ 55,763 ================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Post Petition liabilities (MOR-4) 48 20,014 648 1,953 Pre-Petition liabilities: Notes Payable - Secured * 3,652 67,152 - - Secured Debt Accrued Interest * 474 8,702 - - Unsecured debt 840 265,052 170 62,478 Other / Intercompany - 5,351 - Deferred income taxes - - - - Common stock held by new ESOP - - - - Less: Unearned compensation - - - - Redeemable preferred stock - - - - STOCKHOLDERS' EQUITY: Common stock, $.01 par value - 48 - - Additional paid-in capital - 83,348 4,232 1,803 Retained earnings-Filing Date 779 (90,594) (877) (10,909) Retained earnings-Post Filing Date (447) 693 (511) 438 Pension adjustment - - - - Accumulated translation adj. - - - - Deferred compensation - - - - ---------------------------------------------------------------------------------- 332 (6,505) 2,844 (8,668) Treasury stock at cost - - - - ---------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 332 (6,505) 2,844 (8,668) TOTAL LIABILITIES AND EQUITY $ 5,346 $ 359,766 $ 3,662 $ 55,763 ==================================================================================
------------------------------------ DEBTORS ASSETS ELIMINATIONS CONSOLIDATED ------------------------------------ Current Assets: Cash and cash equivalents $ - $ 2,328 Trade accounts receivable, net - 54,850 Other Receivables - 9,597 Due from affiliates (99,100) (1,796) Inventories - 43,997 Prepaid expenses - 4,196 Deferred income tax benefit - - -------------------------------- TOTAL CURRENT ASSETS (99,100) 113,172 Property, plant and equipment, net - 175,790 Deferred income taxes - - Investments-Third Party - 7,665 Investments in Subs (382,169) 45,453 Other assets (1) 45,946 -------------------------------- TOTAL ASSETS $(481,270) $ 388,026 ================================ LIABILITIES AND STOCKHOLDERS' EQUITY Post Petition liabilities (MOR-4) (38,587) 133,524 Pre-Petition liabilities: Notes Payable - Secured * (60,873) 295,000 Secured Debt Accrued Interest * (7,889) 38,230 Unsecured debt (132,154) 735,398 Other / Intercompany (201,020) 5,351 Deferred income taxes - - Common stock held by new ESOP - 289 Less: Unearned compensation - - Redeemable preferred stock - 27,297 STOCKHOLDERS' EQUITY: Common stock, $.01 par value (1) 123 Additional paid-in capital (40,746) (546,057) Retained earnings-Filing Date - (244,777) Retained earnings-Post Filing Date - (50,415) Pension adjustment - (3,398) Accumulated translation adj. - - Deferred compensation - (2) -------------------------------- (40,747) (844,526) Treasury stock at cost - (2,537) -------------------------------- TOTAL STOCKHOLDERS' EQUITY (40,747) (847,063) TOTAL LIABILITIES AND EQUITY $(481,270) $ 388,026 ================================
* Senior Secured Notes were issued by Sterling Chemicals, Inc., but a percentage is pushed down to the subsidiaries. MOR 2 - 3 CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-037806-H4-11 SCHEDULE OF POST-PETITION LIABILITIES
---------------------------------------------------------------------------------------- 8/31/2001(1) 9/30/01 10/31/01 11/30/01 12/31/01 1/31/02 MONTH ---------------------------------------------------------------------------------------- TRADE ACCOUNTS PAYABLE $ 28,667 $ 34,262 $ 29,556 $ 7,603 $ 25,602 $ 43,566 $ -- ROYALTY AND REVENUE PAYABLE -- -- -- -- -- -- -- NOTES PAYABLE - INSURANCE -- -- -- -- -- -- -- TAX PAYABLE: -- -- -- -- -- -- Federal Payroll Taxes -- -- -- 260 -- -- -- State Payroll & Sales 48 33 45 39 178 231 -- Ad Valorem Taxes -- -- -- -- -- -- -- Other Taxes 925 1,550 2,175 2,800 $ 3,383 $ 3,901 -- TOTAL TAXES PAYABLE $ 973 $ 1,583 $ 2,220 $ 3,099 3,561 4,132 $ -- SECURED DEBT POST-PETITION 41,472 42,229 44,780 49,084 51,301 51,346 -- ACCRUED INTEREST PAYABLE 234 263 299 469 436 370 -- *ACCRUED PROFESSIONAL FEES: 2,000 4,000 4,802 4,798 4,714 5,236 -- OTHER ACCRUED LIABILITIES: 1. General and Administrative Costs 22,593 21,744 21,729 22,520 31,422 37,458 -- 2. Lease Operating Expenses/Capital -- -- -- -- -- -- TOTAL POST-PETITION LIABILITIES (MOR-3) $ 95,939 $ 104,081 $ 103,386 $ 87,573 $ 117,036 $ 142,108 $ -- ==============================================================================================================================
*Payment Requires Court Approval (1) Represents the period 07/17/01 thru 08/31/01 MOR-4 CONSOLIDATED DEBTORS(1)
AGING OF POST-PETITION LIABILITIES MONTH 1/31/02 ------------------ AD-VALOREM, ROYALTY DAYS TOTAL TRADE ACCTS FED TAXES STATE TAXES OTHER TAXES AND INSURANCE ---- -------- ----------- --------- ----------- ----------- ------------- 0-30 $ 75,457 $ 70,976 $ -- $ 228 $ 4,253 $ -- 31-60 61-90 91 + -------- --------- --------- ----------- ----------- ------------- TOTAL $ 75,457 $ 70,976 $ -- $ 228 $ 4,253 $ -- ======== ========= ========= =========== =========== =============
AGING OF ACCOUNTS RECEIVABLE(1)
MONTH --------- 0-30 $ 42,738 $ 42,738 $ -- $ -- $ -- $ -- 31-60 1,086 1,086 -- -- -- -- 61-90 (82) (82) -- -- -- -- 91 + 22,940 22,940 -- -- -- -- -------- -------- -------- -------- -------- -------- TOTAL $ 66,682 $ 66,682 $ -- $ -- $ -- $ -- ======== ======== ======== ======== ======== ========
(1) MOR 5 is presented only on a consolidated debtor basis. (2) Days aging from due date. (3) Days aging from invoice due date. MOR-5 CASE NAME: STERLING CHEMICALS HOLDINGS, INC (ALL DEBTORS) FOR THE MONTH ENDING JANUARY 31, 2002 STATEMENT OF INCOME (LOSS)
STERLING CHEMICALS STERLING CHEMICALS, STERLING CHEMICALS STERLING FIBERS, HOLDINGS, INC. INC. ENERGY, INC. INC. MONTH 01-37805-H4-11 01-37806-H4-11 01-37807-H4-11 01-37808-H4-11 ------------------ ------------------ ------------------ ------------------ REVENUES (MOR-1) $ -- $ 20,053,870 $ 302,130 $ 1,578,891 TOTAL COST OF REVENUES -- 19,648,584 302,130 1,802,124 GROSS PROFIT $ -- $ 405,286 $ -- $ (223,233) ==================================================================================================================================== OPERATING EXPENSES: Selling, General & Administrative $ 51,350 $ 888,529 $ -- $ 115,959 Insiders Compensation -- 142,597 -- -- Professional Fees -- 1,707,557 -- -- Other (Earnings in Joint Venture) -- 464,670 (464,670) -- TOTAL OPERATING EXPENSE $ 51,350 $ 3,203,353 $ (464,670) $ 115,959 ==================================================================================================================================== INCOME BEFORE INT. DEPR/TAX (MOR-1) $ (51,350) $ (2,798,067) $ 464,670 $ (339,192) INTEREST EXPENSE (includes amort of debt fees) (184) 2,500,805 -- 614,434 DEPRECIATION -- 1,881,286 -- 47,618 OTHER (INCOME) EXPENSES* -- -- -- -- OTHER ITEMS** -- -- -- -- TOTAL INT. DEPR & OTHER ITEMS $ (184) $ 4,382,091 $ -- $ 662,052 ==================================================================================================================================== NET INCOME BEFORE TAXES $ (51,166) $ (7,180,158) $ 464,670 $ (1,001,244) INCOME TAXES -- -- 24,982 -- ==================================================================================================================================== NET INCOME (LOSS) (MOR-1) $ (51,166) $ (7,180,158) $ 439,688 $ (1,001,244) ==================================================================================================================================== STERLING CHEMICALS STERLING CANADA, STERLING PULP INT'L, INC. INC. CHEMICALS US, INC. MONTH 01-37809-H4-11 01-37810-H4-11 01-37811-H4-11 ------------------ ------------------ ------------------ REVENUES (MOR-1) $ 83,333 $ 1,059,266 $ 328,152 TOTAL COST OF REVENUES -- 193,620 499,502 GROSS PROFIT $ 83,333 $ 865,646 $ (171,350) ============================================================================================================== OPERATING EXPENSES: Selling, General & Administrative $ 5,970 $ 281,125 $ (90,173) Insiders Compensation -- -- -- Professional Fees -- -- -- Other (Earnings in Joint Venture) -- -- -- TOTAL OPERATING EXPENSE $ 5,970 $ 281,125 $ (90,173) ============================================================================================================== INCOME BEFORE INT. DEPR/TAX (MOR-1) $ 77,363 $ 584,521 $ (81,177) INTEREST EXPENSE (includes amort of debt fees) 37,665 160,570 -- DEPRECIATION 23,000 485,795 -- OTHER (INCOME) EXPENSES* -- -- -- OTHER ITEMS** -- -- -- TOTAL INT. DEPR & OTHER ITEMS $ 60,665 $ 646,365 $ -- ============================================================================================================== NET INCOME BEFORE TAXES $ 16,698 $ (61,844) $ (81,177) INCOME TAXES -- -- -- ============================================================================================================== NET INCOME (LOSS) (MOR-1) $ 16,698 $ (61,844) $ (81,177) ============================================================================================================== STERLING PULP CHEMICALS, INC. DEBTORS MONTH 01-37812-H4-11 ELIMINATIONS CONSOLIDATED ------------------ ------------------ ------------------ REVENUES (MOR-1) $ 3,335,583 $ (83,333) $ 26,657,892 TOTAL COST OF REVENUES 2,068,154 (83,333) 24,430,781 GROSS PROFIT $ 1,267,429 $ -- $ 2,227,111 ================================================================================================================= OPERATING EXPENSES: Selling, General & Administrative $ 627,517 $ (558,861) 1,321,416 Insiders Compensation -- -- 142,597 Professional Fees -- -- 1,707,557 Other (Earnings in Joint Venture) -- -- -- TOTAL OPERATING EXPENSE $ 627,517 $ (558,861) $ 3,171,570 ================================================================================================================= INCOME BEFORE INT. DEPR/TAX (MOR-1) $ 639,912 $ 558,861 (944,459) INTEREST EXPENSE (includes amort of debt fees) -- 558,861 3,872,151 DEPRECIATION 407,434 -- 2,845,133 OTHER (INCOME) EXPENSES* -- -- -- OTHER ITEMS** -- -- -- TOTAL INT. DEPR & OTHER ITEMS $ 407,434 $ 558,861 $ 6,717,284 ================================================================================================================= NET INCOME BEFORE TAXES $ 232,478 $ -- $ (7,661,743) INCOME TAXES -- -- 24,982 ================================================================================================================= NET INCOME (LOSS) (MOR-1) $ 232,478 $ -- $ (7,686,725) =================================================================================================================
Accrual Accounting Required, Otherwise Footnote With Explanation * Footnote Mandatory ** Unusual and/or frequent item(s) outside the ordinary course of business; requires footnote MOR-6 CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-37806-H-11
CASH RECEIPTS AND FILING TO DISBURSEMENTS 8/31/2001(1) Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 DATE ------------- ------------ ---------- ----------- ---------- ---------- ---------- ----------- 1. CASH-BEGINNING OF MONTH 9,346,548 1,430,565 1,217,400 159,499 (421,404) (256,194) 11,476,412 ========== ========== =========== ========== ========== ========== =========== RECEIPTS: 2. CASH SALES -- -- -- -- -- -- -- 3. COLLECTION OF ACCOUNTS RECEIVABLE 40,926,868 20,950,661 23,372,230 20,886,265 22,270,996 24,602,303 153,009,323 4. LOANS & ADVANCES - CIT REVOLVER 32,400,000 30,000,000 35,600,000 31,300,000 29,200,000 31,600,000 190,100,000 5. SALE OF ASSETS -- -- -- -- -- -- -- 6. OTHER (attach list) 17,276,763 9,809,132 12,435,815 12,134,485 11,415,178 9,644,850 72,716,222 ---------- ---------- ---------- ---------- ---------- ---------- ----------- TOTAL RECEIPTS 90,603,630 60,759,793 71,408,045 64,320,750 62,886,174 65,847,152 415,825,545 ---------- ---------- ---------- ---------- ---------- ---------- ----------- (Withdrawal)Contribution by Individual Debtor MFR-2* N/A N/A N/A N/A N/A N/A N/A ========== ========== =========== ========== ========== ========== =========== DISBURSEMENTS: 7. NET PAYROLL 2,731,080 1,885,987 1,820,918 2,759,985 1,932,984 1,297,213 12,428,166 8. PAYROLL TAXES PAID 1,296,961 929,631 898,310 443,402 870,019 974,973 5,413,295 9. SALES, USE & OTHER TAXES PAID 32,514 59,392 54,688 55,177 50,776 57,123 309,671 10.SECURED/RENTAL/LEASES 150,961 223,715 267,731 179,910 184,920 161,222 1,168,459 11.UTILITIES 2,879,979 2,190,006 5,169,539 3,737,135 4,230,558 2,765,343 20,972,561 12.INSURANCE 1,469,518 830,148 452,349 425,842 456,145 728,204 4,362,206 13.INVENTORY PURCHASES 11,912,436 10,899,473 12,316,618 12,485,921 8,921,056 11,876,414 68,411,918 14.VEHICLE EXPENSES -- -- -- -- -- -- -- 15.TRAVEL & ENTERTAINMENT 39,341 31,508 48,462 53,052 64,095 60,079 296,538 16.REPAIRS, MAINTENANCE & SUPPLIES 1,279,095 1,162,418 1,519,414 1,100,361 1,085,130 1,487,951 7,634,369 17.ADMINISTRATIVE & SELLING 2,731,486 1,698,951 3,178,324 3,136,392 3,142,158 2,804,552 16,691,862 18.OTHER (attach list) 73,996,239 41,050,486 45,331,111 39,721,594 41,099,335 41,641,012 282,839,777 TOTAL DISBURSEMENTS FROM OPERATIONS 98,519,611 60,961,714 71,057,466 64,098,769 62,037,177 63,854,086 420,528,823 19.PROFESSIONAL FEES -- 11,243 1,368,231 802,884 683,788 1,185,274 4,051,420 20.U.S. TRUSTEE FEES -- -- 40,250 -- -- 53,500 93,750 21.OTHER REORGANIZATION EXPENSES (attach list) -- -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ----------- TOTAL DISBURSEMENTS 98,519,611 60,972,958 72,465,946 64,901,653 62,720,965 65,092,860 424,673,993 ========== ========== =========== ========== ========== ========== =========== 22.NET CASH FLOW (7,915,980) (213,165) (1,057,901) (580,903) 165,210 754,292 (8,848,448) 23.CASH - END OF MONTH (MOR-2) 1,430,565 1,217,400 159,499 (421,404) (256,194) 498,098 2,627,964
(1) REPRESENTS THE PERIOD 07/17/01 THRU 08/31/01 MOR-7 *Applies to Individual debtor's only. per MOR-7 1,430,565.35 1,217,400.33 159,499.29 (421,403.88) (256,194.38) 498,097.76 per 211 trial balance 2,156,824.40 1,222,225.02 926,043.98 527,547.60 622,716.13 1,983,218.51 ------------ ------------ ---------- ----------- ----------- ------------ difference 726,259.05 4,824.69 766,544.69 948,951.48 878,910.51 1,485,120.75 g/l acct 10123 - not a good account, s/b zero 794.70 794.70 794.70 794.70 794.70 794.70 g/l acct 10131 - account was closed before filing, bal s/b zero 4,029.99 4,029.99 4,029.99 4,029.99 4,029.99 4,029.99 g/l acct 10199 - cash overdraft reclass of outstanding checks 721,434.36 0.00 761,720.00 944,126.79 874,085.82 1,480,296.06 ------------ ------------ ---------- ----------- ---------- ------------ reconciled difference 726,259.05 4,824.69 766,544.69 948,951.48 878,910.51 1,485,120.75
CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-37806-H-11
OTHER CASH RECEIPTS AND FILING TO DISBURSEMENTS: 8/31/2001(1) Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 DATE ------------ ---------- ---------- ---------- ----------- ---------- ------------ 6. OTHER RECEIPTS: Interest Income -- 80,302 -- -- -- -- 80,302 401(k) Plan Refund -- -- -- -- -- -- -- Cobra Insurance Payment -- -- -- -- -- -- -- Miscellaneous 323,832 156,450 1,147,947 181,336 146,500 100,833 2,056,898 Royalty Owners Trust Account -- -- -- -- -- -- -- Emission Credits -- -- -- -- -- -- -- Account Transfers 16,952,931 8,360,380 11,197,868 9,047,528 10,348,106 9,120,571 65,027,384 Intercompany Transfers -- 1,212,000 90,000 2,905,621 920,573 423,445 5,551,639 ------------ ---------- ---------- ---------- ----------- ---------- ------------ TOTAL OTHER RECEIPTS 17,276,763 9,809,132 12,435,815 12,134,485 11,415,178 9,644,850 72,716,223 ============ ========== ========== ========== =========== ========== ============ 18. OTHER DISBURSEMENTS: Lease Operating Expense -- -- -- -- -- -- -- Workover Expense -- -- -- -- -- -- -- Capital Expenditures 157,217 352,420 408,428 297,523 558,388 1,491,633 3,265,609 Revenue & Royalties -- -- -- -- -- -- -- Interest Payment -- -- 97,161 -- -- -- 97,161 Employee Benefits 1,716,761 1,923,632 2,430,056 1,259,446 1,276,424 2,711,036 11,317,355 Severance tax -- -- -- -- -- -- -- Pre-petition checks voided in current period (30,000) -- -- -- -- -- (30,000) Account Transfers 16,952,931 8,360,380 11,197,868 9,047,528 10,348,106 9,120,571 65,027,384 CIT Revolver Payments 51,857,690 24,100,472 24,983,680 21,322,848 22,948,750 23,718,420 168,931,860 Intercompany Transfers 3,341,640 6,313,582 6,213,918 7,794,248 5,967,667 4,599,352 34,230,407 ------------ ---------- ---------- ---------- ----------- ---------- ------------ TOTAL OTHER DISBURSEMENTS 73,996,239 41,050,486 45,331,111 39,721,594 41,099,335 41,641,012 282,839,777 ============ ========== ========== ========== =========== ========== ============
(1) REPRESENTS THE PERIOD 07/17/01 THRU 08/31/01 MOR-7 ATTACHMENT CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-37806-H-11
CASH RECEIPTS AND Chase Chase Chase Chase Chase DISBURSEMENTS 00103275427 00101824317 00103316882 103405743 6301810002508 ----------------- --------------- --------------- --------------- --------------- --------------- 1. CASH-BEGINNING OF MONTH -- 100 39,463 556,255 (874,086) =============== =============== =============== =============== =============== RECEIPTS: 2. CASH SALES -- -- -- -- -- 3. COLLECTION OF ACCOUNTS RECEIVABLE 21,162,357 4. LOANS & ADVANCES - CIT REVOLVER 31,600,000 5. SALE OF ASSETS 6. OTHER (attach list) -- -- 423,445 2,700,000 5,875,370 --------------- --------------- --------------- --------------- --------------- TOTAL RECEIPTS -- 21,162,357 32,023,445 2,700,000 5,875,370 --------------- --------------- --------------- --------------- --------------- (Withdrawal)Contribution by Individual Debtor MFR-2* N/A N/A N/A N/A N/A =============== =============== =============== =============== =============== DISBURSEMENTS: 7. NET PAYROLL -- 1,297,213 -- 8. PAYROLL TAXES PAID 974,973 9. SALES, USE & OTHER TAXES PAID 57,123 10. SECURED/RENTAL/LEASES 161,222 11. UTILITIES 2,765,343 12. INSURANCE 227,969 500,235 13. INVENTORY PURCHASES 11,721,051 155,363 14. VEHICLE EXPENSES 15. TRAVEL & ENTERTAINMENT 60,079 16. REPAIRS, MAINTENANCE & SUPPLIES 959,839 528,111 17. ADMINISTRATIVE & SELLING 302,120 2,489,967 18. OTHER (attach list) -- 21,162,357 15,479,667 -- 1,897,725 --------------- --------------- --------------- --------------- --------------- TOTAL DISBURSEMENTS FROM OPERATIONS -- 21,162,357 31,513,112 2,272,186 5,792,702 =============== =============== =============== =============== =============== 19. PROFESSIONAL FEES -- -- 497,243 -- 688,031 20. U.S. TRUSTEE FEES -- -- -- -- 53,500 21. OTHER REORGANIZATION EXPENSES (attach list) -- -- -- -- -- --------------- --------------- --------------- --------------- --------------- TOTAL DISBURSEMENTS -- 21,162,357 32,010,355 2,272,186 6,534,233 =============== =============== =============== =============== =============== 22. NET CASH FLOW -- -- 13,090 427,814 (658,864) 23. CASH - END OF MONTH (MOR-2) -- 100 52,553 984,069 (1,532,949) CASH RECEIPTS AND Chase Chase Wells Fargo Bank One Total DISBURSEMENTS 6301810036508 6301810028508 4496870106 5561833 Debtor ----------------- --------------- --------------- --------------- --------------- --------------- 1. CASH-BEGINNING OF MONTH -- -- -- 22,073 (256,194) =============== =============== =============== =============== =============== RECEIPTS: 2. CASH SALES -- -- -- -- -- 3. COLLECTION OF ACCOUNTS RECEIVABLE 3,439,945 24,602,303 4. LOANS & ADVANCES - CIT REVOLVER 31,600,000 5. SALE OF ASSETS -- 6. OTHER (attach list) 537,106 8,096 -- 100,833 9,644,850 --------------- --------------- --------------- --------------- --------------- TOTAL RECEIPTS 537,106 8,096 -- 3,540,779 65,847,152 --------------- --------------- --------------- --------------- --------------- (Withdrawal)Contribution by Individual Debtor MFR-2* N/A N/A N/A N/A N/A =============== =============== =============== =============== =============== DISBURSEMENTS: 7. NET PAYROLL -- -- -- -- 1,297,213 8. PAYROLL TAXES PAID 974,973 9. SALES, USE & OTHER TAXES PAID 57,123 10. SECURED/RENTAL/LEASES 161,222 11. UTILITIES 2,765,343 12. INSURANCE 728,204 13. INVENTORY PURCHASES 11,876,414 14. VEHICLE EXPENSES -- 15. TRAVEL & ENTERTAINMENT 60,079 16. REPAIRS, MAINTENANCE & SUPPLIES 1,487,951 17. ADMINISTRATIVE & SELLING 12,465 2,804,552 18. OTHER (attach list) 537,106 8,096 -- 2,556,062 41,641,012 --------------- --------------- --------------- --------------- --------------- TOTAL DISBURSEMENTS FROM OPERATIONS 537,106 8,096 -- 2,568,527 63,854,086 =============== =============== =============== =============== =============== 19. PROFESSIONAL FEES -- -- -- -- 1,185,274 20. U.S. TRUSTEE FEES -- -- -- -- 53,500 21. OTHER REORGANIZATION EXPENSES (attach list) -- -- -- -- -- --------------- --------------- --------------- --------------- --------------- TOTAL DISBURSEMENTS 537,106 8,096 -- 2,568,527 65,092,860 =============== =============== =============== =============== =============== 22. NET CASH FLOW -- -- -- 972,251 754,292 23. CASH - END OF MONTH (MOR-2) -- -- -- 994,325 498,098
MOR-7 * Applies to Individual debtor's only. CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-37806-H4-11
OTHER CASH RECEIPTS AND Chase Chase Chase Chase Chase DISBURSEMENTS: 00103275427 00101824317 00103316882 103405743 6301810002508 -------------- ----------- ----------- ----------- --------- ------------- 6. OTHER RECEIPTS: Interest Income 401(k) Plan Refund Cobra Insurance Payment Miscellaneous Royalty Owners Trust Account Emission Credits Account Transfers 2,700,000 5,875,370 Intercompany Transfers 423,445 ----------- ---------- ---------- --------- --------- TOTAL OTHER RECEIPTS -- -- 423,445 2,700,000 5,875,370 =========== ========== ========== ========= ========= 18. OTHER DISBURSEMENTS: Lease Operating Expense Workover Expense Capital Expenditures 1,491,633 Revenue & Royalties Interest Payment Employee Benefits 1,759,743 406,092 Severance tax Pre-petition checks voided in current period Account Transfers 9,120,571 CIT Revolver Payments 21,162,357 -- Intercompany Transfers 4,599,352 ----------- ---------- ---------- --------- --------- TOTAL OTHER DISBURSEMENTS -- 21,162,357 15,479,667 -- 1,897,725 =========== ========== ========== ========= ========= OTHER CASH RECEIPTS AND Chase Chase Wells Fargo Bank One Total DISBURSEMENTS: 6301810036508 6301810028508 4496870106 5561833 Debtor -------------- ------------- ------------- -------------- ------------ ------------- 6. OTHER RECEIPTS: Interest Income -- 401(k) Plan Refund -- Cobra Insurance Payment -- Miscellaneous 100,833 100,833 Royalty Owners Trust Account -- Emission Credits -- Account Transfers 537,106 8,096 9,120,571 Intercompany Transfers 423,445 ------- --------- ------------ ---------- ---------- TOTAL OTHER RECEIPTS 537,106 8,096 -- 100,833 9,644,850 ======= ========= ============ ========== ========== 18. OTHER DISBURSEMENTS: Lease Operating Expense -- Workover Expense -- Capital Expenditures 1,491,633 Revenue & Royalties -- Interest Payment -- Employee Benefits 537,106 8,096 2,711,036 Severance tax -- Pre-petition checks voided in current period -- Account Transfers 9,120,571 CIT Revolver Payments 2,556,062 23,718,420 Intercompany Transfers 4,599,352 ------- --------- ------------ ---------- ---------- TOTAL OTHER DISBURSEMENTS 537,106 8,096 -- 2,556,062 41,641,012 ======= ========= ============ ========== ==========
MOR-7 ATTACHMENT CASE NAME: Sterling Chemicals, Inc. CASE NUMBER: 01-37806-H4-11 CASH ACCOUNT RECONCILIATION MONTH OF JANUARY 2002 ---------------------------------
Closed BANK NAME Chase Bk of TX Chase Bk of TX Chase Bk of TX Chase Bk of TX Chase Bk of DE ACCOUNT NUMBER 00103275427 00101824317 00103316882 00103405743 6301810036508 -------------- ACCOUNT TYPE Special Disb Fund AR Wires Concentration Payroll Contr. Disb. -------------- ------------------ --------------- --------------- --------------- --------------- BANK BALANCE $ -- $ 100 $ 52,553 $ 95,647 $ -- DEPOSIT IN TRANSIT OUTSTANDING CHECKS (1,511,688) OTHER 888,422 (21,261) --------------- --------------- --------------- --------------- --------------- ADJUSTED BANK BALANCE $ -- $ 100 $ 52,553 $ 984,069 $ (1,532,949) =============== =============== =============== =============== =============== BEGINNING CASH - PER BOOKS $ -- $ 100 $ 39,463 $ 556,255 $ (874,086) RECEIPTS 21,162,357 31,600,000 TRANSFERS BETWEEN ACCOUNTS -- (13,296,478) 2,700,000 5,875,370 (WITHDRAWAL) CONTRIBUTION- BY INDIVIDUAL DEBTOR MFR-2 CHECKS/OTHER DISBURSEMENTS -- (21,162,357) (18,290,432) (2,272,186) (6,534,233) --------------- --------------- --------------- --------------- --------------- ENDING CASH - PER BOOKS $ -- $ 100 $ 52,553 $ 984,069 $ (1,532,949) =============== =============== =============== =============== =============== BANK NAME Chase Bk of Del Chase Bk of Del Wells Fargo Bank One ACCOUNT NUMBER 6301810036508 6301810028508 4496870106 5561833 -------------- ACCOUNT TYPE Sal Ben Disb Flex Ben Disb Concentration Lockbox TOTAL -------------- --------------- --------------- --------------- --------------- --------------- BANK BALANCE $ -- $ -- $ -- $ 994,502 $ 1,142,802 DEPOSIT IN TRANSIT -- OUTSTANDING CHECKS (1,511,688) OTHER (176) 866,985 --------------- --------------- --------------- --------------- --------------- ADJUSTED BANK BALANCE $ -- $ -- $ -- $ 994,326 $ 498,098 =============== =============== =============== =============== =============== BEGINNING CASH - PER BOOKS $ -- $ -- $ -- $ 22,074 $ (256,195) RECEIPTS 3,540,779 56,303,136 TRANSFERS BETWEEN ACCOUNTS 537,106 8,096 (4,175,906) (WITHDRAWAL) CONTRIBUTION- -- BY INDIVIDUAL DEBTOR MFR-2 -- CHECKS/OTHER DISBURSEMENTS (537,106) (8,096) (2,568,527) (51,372,937) --------------- --------------- --------------- --------------- --------------- ENDING CASH - PER BOOKS $ -- $ -- $ -- $ 994,326 $ 498,098 =============== =============== =============== =============== ===============
MOR-8 CASE NAME: STERLING CHEMICALS, INC. CASE NUMBER: 01-37806-H4-11 PAYMENT 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 the professionals. Also, for insiders identify the type of compensation paid (e.g., salary, commission, bonus, etc.) (Attach additional pages as necessary.)
FILING TO INSIDERS: NAME/POSITION/COMP TYPE(2) 8/31/2001(1) Sep-2001 Oct-2001 Nov-2001 Dec-2001 Jan-2002 DATE ------------------------------------------------ ------------ -------- ---------- --------- --------- --------- --------- 1. Frank Diassi/Chairman of Board/Salary $ 46,875 $ 31,250 $ 31,250 $ 31,250 $ 31,250 $ -- $ 171,875 2. Frank Diassi/Chairman of Board/Bonus -- 23,438 -- -- 23,438 3. Frank Diassi/Chairman of Board/Expenses 521 1,741 -- -- -- -- 2,262 Frank Diassi/Chairman of Board/Vacation payout 45,193 45,193 4. David Elkins/President/Salary 43,750 29,167 29,167 29,167 29,167 29,167 189,585 5. David Elkins/President/Bonus -- 21,875 -- -- 21,875 -- 43,750 6. David Elkins/President/Expenses 5,013 35 410 -- 2,035 3,378 10,871 David Elkins/President/Life Insurance 2,184 2,184 7. Richard Crump/Exec VP Opers/Salary 37,500 25,000 25,000 25,000 25,000 28,636 166,136 8. Richard Crump/Exec VP Opers/Bonus -- 18,750 -- -- 18,750 1,875 39,375 9. Richard Crump/Exec VP Opers/Expense 2,192 2,939 642 2,331 531 4,453 13,088 10. Paul Vanderhoven/VP Finance & CFO/Salary 25,000 16,667 16,667 16,667 16,667 16,667 108,335 11. Paul Vanderhoven/VP Finance & CFO/Bonus -- 10,000 -- -- 10,000 -- 20,000 12. Paul Vanderhoven/VP Finance & CFO/Expense -- 5,573 974 -- 2,199 4,509 13,255 13. Robert Roten/Former Pres & Board Member/SERP 2,328 2,328 2,328 2,328 2,328 2,328 13,968 14. Robert Roten/Former Pres & Board Member/Consulting fee 10,000 -- -- -- -- -- 10,000 15. Robert Roten/Former Pres & Board Member/BOD fee -- -- 17,550 -- 15,150 32,700 16. Rolf Towe/Board Member -- -- 10,150 -- 10,850 21,000 17. Hunter Nelson/Board Member -- -- 13,550 -- 11,150 24,700 18. Frank Hevrdejs/Board Member -- -- 10,750 -- 12,250 23,000 -------- -------- ---------- --------- --------- --------- --------- TOTAL INSIDERS (MOR-1) $173,179 $188,763 $ 158,438 $ 106,743 $ 204,995 $ 142,597 $ 974,715 ======== ======== ========== ========= ========= ========= =========
PROFESSIONALS FILING TO NAME/ORDER DATE 8/31/2001(1) Sep-2001 Oct-2001 Nov-2001 Dec-2001 Jan-2002 DATE --------------------------------- ------------ --------- ---------- --------- --------- --------- ----------- 1. Logan & Company, Inc. $ -- $ 11,243 $ 15,330 $ 65,978 $ 30,272 $ 9,958.00 $132,781.56 2. Andrews & Kurth LLP -- -- 324,139 -- 210,726 139,340 674,206 3. US Trustee -- -- 40,250 -- -- 53,500 93,750 4. Skadden, Arps, Slate, Meagher & Flom LLP -- -- 751,593 -- -- 293,229 1,044,822 5. Akin Gump Strauss -- -- 277,168 126,980 231,124 -- 635,272 6. Arthur Andersen -- -- -- 134,935 31,792 115,041 281,768 7. Lazard Freres & Co. LLC 268,613 -- -- 268,613 8. Baker & Botts 154,797 132,523 111,985 399,305 9. Groom Law Group 11,331 4,587 10,078 25,996 10. Nexant, Inc. 40,250 42,764 8,399 91,413 11. Greenhill & Co. 497,243 497,243 ------------ --------- ---------- --------- --------- ---------- ----------- TOTAL PROFESSIONALS (MOR-1) $ -- $ 11,243 $1,408,481 $ 802,884 $ 683,788 $1,238,773 $ 4,145,169 ============ ========= ========== ========= ========= ========== ===========
(1) REPRESENTS THE PERIOD 07/17/01 THRU 08/31/01. (2) THE DEBTOR HAS LIMITED THE SCOPE OF ITS ANSWER TO (i) DIRECTORS, (ii) OFFICERS DESIGNATED AS INSIDERS FOR PURPOSES OF SECTION 16(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934, (iii) AFFILIATES; AND (iv) PARTIES TO THE VOTING AGREEMENT GRANTING AUTHORITY TO DESIGNATED THE NOMINEES WHO BENEFIT FROM THE VOTING AGREEMENT. INFORMATION AS TO OFFICERS WHO ARE NOT DESIGNATED AS INSIDERS FOR PURPOSES OF SECTION 16(a) OF THE SEC ACT OF 1934 HAS BEEN COMPLIED BY THE DEBTOR AND WILL BE PROVIDED TO THE OFFICE OF THE UNITED STATES TRUSTEE AND TO THE COUNCIL FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS UPON REQUEST. SUCH INFORMATION PRIMARILY RELATES TO COMPENSATION, BENEFITS AND EXPENSE REIMBURSEMENTS PAYMENTS MADE TO SUCH OFFICERS AS EMPLOYEES OF THE DEBTOR. IT IS THE POLICY OF THE DEBTOR TO PRESERVE THE CONFIDENTIALITY OF SUCH INFORMATION ON BEHALF OF ITS EMPLOYEES. MOR-9