EX-99.10 20 a2042579zex-99_10.txt EXHIBIT 99.10 -------------------------------------------------------------------------------- OFFICE OF THE UNITED STATES TRUSTEE -------------------------------------------------------------------------------- IN RE: ) DEBTOR IN POSSESSION OPERATING REPORT ) SUPERIOR NATIONAL INSURANCE GROUP ) REPORT NUMBER 8 Page 1 of 3 ) FOR THE PERIOD FROM: 01-Nov-00 DEBTOR ) TO: 30-Nov-00 ) _________________________________________ ____________________________________ CHAPTER 11 CASE NO. SV00-14099-GM ) ____________________________________ 1. Profit and Loss Statement Please see Attached Schedule A A. Related to Business Operations: Gross Sales ________________ Less Sales Returns and Discounts ________________ Net Sales _____________ Less: Cost of Goods Sold Beginning Inventory at Cost ________________ Add: Purchases ________________ Less: Ending Inventory at Cost ________________ Cost of Goods Sold _____________ Gross Profit ______________ Other Operating Revenue (Specify) ______________ Less: Operating Expenses Officer Compensation ________________ Salaries & Wages - Other Employees ________________ Total Salaries & Wages _____________ Employee Benefits _____________ Payroll Taxes ________________ Real Estate Taxes ________________ Federal and State Income Taxes ________________ Total Taxes _____________ Rent and Lease Exp. (Real and Personal Property) ________________ Interest Expense (Mortgage, Loan, etc.) ________________ Insurance ________________ Automobile Expense ________________ Utilities (Gas, Electric, Water, Telephone, etc.) ________________ Depreciation and Amortization ________________ Repairs and Maintenance ________________ Advertising ________________ Supplies, Office Expenses, Photocopiers, etc. ________________ Bad Debts ________________ Miscellaneous Operating Expenses (Specify) ________________ Total Operating Expenses _____________ Net Gain/(Loss) from Business Operations ______________ B. Not Related to Business Operations ______________ Income: Interest Income _____________ Other Non-Operating Revenues (Specify) _____________ Gross Proceeds on Sale of Assets ________________ Less: Original Cost of Assets plus Expenses of Sale ________________ Net Gain/(Loss) on Sale of Assets _____________ Total Non-Operating Income ______________ Expenses Not Related to Business Operations: Legal and Professional Fees _____________ Other Non-Operating Revenues (Specify) _____________ Total Non-Operating Expenses ______________ NET INCOME/(LOSS) FOR PERIOD ==============
-------------------------------------------------------------------------------- Revised April 1989 OPERATING REPORT UST-4 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- DEBTOR IN POSSESSION OPERATING REPORT NO. 8 -------------------------------------------------------------------------------- Page 2 of 3 2. Aging of Accounts Payable and Receivable (exclude pre-petition debt from accounts payable): -------------------------------------------- Accounts Payable Accounts Receivable -------------------------------------------- Current Under 30 days $0 $0 Overdue 31 - 60 days $0 $0 Overdue 61 - 90 days PLEASE SEE ATTACHED SCHEDULE B Overdue 91 - 120 days $0 $0 Overdue 121 + days $0 $0 Total $0 $0 -------------------------------------------- 3. Statement of Status of Payments to Secured Creditors and Lessors:
-------------------------------------------------------------------------------------------------------------- Post-Petition Frequency of Payments Not Made Payments per Amount of ----------------------- Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount -------------------------------------------------------------------------------------------------------------- SEE ATTACHED SCHEDULE C --------------------------------------------------------------------------------------------------------------
4. Tax Liability Gross Payroll Expense For Period $216,387 Gross Sales for Period Subject to Sales tax $ 0
--------------------------------------------------------------- Post Petition Taxes Date Paid Amount Paid* Still Owing --------------------------------------------------------------- Federal Payroll and Withholding Taxes 11/15/00 & 11/30/00 $66,563 0 State Payroll and Withholding Taxes 11/15/00 & 11/30/00 $12,803 0 State Sales and Use Tax N/A $0 N/A Real Property Taxes N/A $0 N/A ---------------------------------------------------------------
ALL PAYROLL TAXES PAID BY ADP * Attach photocopies of depository receipts from taxing authority or financial institution to verify that such deposits or payments have been made. 5. Insurance Coverage
--------------------------------------------------------------------------- Carrier/ Amount of Policy Premium Paid Agent Coverage Exp. Date Thru Date --------------------------------------------------------------------------- Worker's Compensation See Schedule D Liability See Schedule E Fire and Extended Coverage See Schedule E Property See Schedule E Theft See Schedule E Life (Beneficiary:______________) See Schedule E Vehicle See Schedule E Other See Schedule E ---------------------------------------------------------------------------
-------------------------------------------------------------------------------- DEBTOR IN POSSESSION OPERATING REPORT NO. 8 -------------------------------------------------------------------------------- Page 3 of 3 6. Questions A. Has the Debtor provided to the officers, directors, shareholders or other principals compensation without the approval of the Office of the United States Trustee? ______: Yes Explain:_______________________________________________ ___X__: No B. Has the Debtor, subsequent to the filing of the petition made any payments on its pre-petition unsecured debt, except as have been authorized by the Court? ______: Yes Explain:_______________________________________________ ___X__: No 7. Statement of Unpaid Professional Fees (Post-Petition Only): ------------------------------------------------------------ Type Post-Petition Name of Professional Professional Unpaid Total ------------------------------------------------------------ See Schedule F ------------------------------------------------------------ 8. Narrative Report of Significant Events and Events Out of the Ordinary Course of Business: 9. Quarterly Fees: (This Fee must be paid to the United States Trustee every calendar quarter)
--------------------------------------------------------------------------------------------------------------- Quarterly Quarterly Disbursements Quarterly Quarterly Period Ending for Quarter Fee Date Paid Amount Paid Check No. Fee Still Owing --------------------------------------------------------------------------------------------------------------- 6/30/00 $2,219,893.00 $7,500.00 8/1/00 $250.00 114 $0.00 8/4/00 $4,750.00 116 $0.00 11/4/00 $2,500.00 140 $0.00 9/30/00 $4,975,754.00 $8,000.00 11/4/00 $8,000.00 138 $0.00 ---------------------------------------------------------------------------------------------------------------
I, Alex Corbett, Chief Financial Officer, declare under penalty of perjury that the information contained in the above Debtor in Possession Operating Report is true and complete to the best of my knowledge. Dated 11/11/01 Signed: /s/ Alex Corbett --------------- ------------------------------- SCHEDULE A SNIG, BIG, SNIA and SNIS Schedule of Operations One Month ended December 31, 2000 [Bankruptcy filed April 26, 2000] (unaudited)
(In thousands) Consolidated SNIG BIG SNIA SNIS Elimination Total ------- ------- ------- ------- ----------- ------------- Revenues: Commission income $ -- $ -- $ -- $ 136 $ -- $ 136 Net investment income 13 32 3 102 -- 150 ------- ------- ------- ------- ---------- --------- Total Revenues 13 32 3 238 -- 286 ------- ------- ------- ------- ---------- --------- Expenses: Interest expenses 1,061 -- -- -- -- 1,061 Bad debt expense -- -- -- 140(A) -- 140 General and administrative Other 93 1 27 373 -- 494 ------- ------- ------- ------- ---------- --------- Total Expenses 1,154 1 27 513 -- 1,695 ------- ------- ------- ------- ---------- --------- Income (loss) before income taxes and preferred securities dividends and accretion (1,141) 31 (24) (276) -- (1,409) Income tax (benefit) expense -- -- (1) 1 -- -- ------- ------- ------- ------- ---------- --------- Income (loss) before preferred securities dividends and accretion (1,141) 31 (23) (276) -- (1,409) Preferred securities dividends and accretion (992) -- -- -- -- (992) Expenses not related to business operations: Legal and Professional Fees 77 -- -- -- -- 77 Other non-operating expenses (11) -- (10) (15) -- (36) ------- ------- ------- ------- ---------- --------- (2,067) 31 (33) (291) -- (2,360) Equity in income (loss) from subsidiaries (282) (314) -- -- 607 11 ------- ------- ------- ------- ---------- --------- Net (Loss) Income $(2,349) $ (283) $ (33) $ (291) $ 607 $ (2,349) ======= ======= ======= ======= ========== =========
(A) Amount reflects a recording of an allowance for bad debt on collection of commissions receivable. Debtor continues to assert rights of offset and other methods to effectuate collection. SCHEDULE B Superior National Insurance Group, Inc. in Bankruptcy Aging of Accounts Payable and Receivable As of November 30, 2000
Superior National Insurance Group --------------------------------------- ---------------------------------------- Non-Intercompany Accounts Intercompany Accounts --------------------------------------- ---------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable --------------------------------------- ---------------------------------------- Current Under 30 days 252,332 63,008 284,897 3,581 Overdue 31 - 60 days 1,258,087 156,054 0 143,001 Overdue 61 - 90 days 7,000 3,568 0 -- Overdue 91 - 120 days 7,000 10,944 -- -- Overdue 121 + days 18,728 54,862 1 500,009 --------------------------------------- ---------------------------------------- Total $ 1,543,147 $ 288,435[A] $ 284,899 $ 646,591 --------------------------------------- ---------------------------------------- Business Insurance Group --------------------------------------- ---------------------------------------- Non-Intercompany Accounts Intercompany Accounts --------------------------------------- ---------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable --------------------------------------- ---------------------------------------- Current Under 30 days -- -- -- -- Overdue 31 - 60 days -- -- -- -- Overdue 61 - 90 days -- -- -- -- Overdue 91 - 120 days -- -- -- -- Overdue 121 + days 16,442 601,265 -- 14,963,854 --------------------------------------- ---------------------------------------- Total $ 16,442 601,265 -- 14,963,854 --------------------------------------- ---------------------------------------- Superior National Insurance Services --------------------------------------- ---------------------------------------- Non-Intercompany Accounts Intercompany Accounts --------------------------------------- ---------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable --------------------------------------- ---------------------------------------- Current Under 30 days 1,599,356 157,845 -- 317,342 Overdue 31 - 60 days 14,344 690,714 -- 2,421 Overdue 61 - 90 days 76,089 894,035 -- -- Overdue 91 - 120 days 119,513 1,186,309 -- -- Overdue 121 + days 559,960 9,083,034 -- 657,624 --------------------------------------- ---------------------------------------- Total $ 2,369,262 $ 12,011,937[B] $ -- $ 977,387 --------------------------------------- ---------------------------------------- Superior National Insurance Administrators --------------------------------------- ---------------------------------------- Non-Intercompany Accounts Intercompany Accounts --------------------------------------- ---------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable --------------------------------------- ---------------------------------------- Current Under 30 days 51,276 -- 36,026 -- Overdue 31 - 60 days 887 -- 145,423 -- Overdue 61 - 90 days 2,382 316,421 -- -- Overdue 91 - 120 days 3,721 489,634 -- -- Overdue 121 + days 83,685 5,571,142 829,569 98,383 --------------------------------------- ---------------------------------------- Total $ 141,951 $ 6,377,198[C] $ 1,011,017 $ 98,383 --------------------------------------- ---------------------------------------- Consolidated --------------------------------------- ---------------------------------------- Non-Intercompany Accounts Intercompany Accounts --------------------------------------- ---------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable --------------------------------------- ---------------------------------------- Current Under 30 days 1,902,964 220,853 320,923 320,923 Overdue 31 - 60 days 1,273,318 846,768 145,423 145,423 Overdue 61 - 90 days 85,470 1,214,025 -- -- Overdue 91 - 120 days 130,234 1,686,887 -- -- Overdue 121 + days 678,815 15,310,304 829,570 16,219,870 --------------------------------------- ---------------------------------------- Total $ 4,070,801 $ 19,278,835 $ 1,295,916 $ 16,686,216 --------------------------------------- ----------------------------------------
[A] Amounts in accounts payable do not include interest due and accrued on bank loan and Trust Preferred Securities. [B] Amounts shown in accounts receivable do not include recorded amounts on allowance for bad debt on collection of commissions receivable, in which the Debtor continues to assert rights of offset and other methods to effectuate collection. [C] Amounts shown in accounts receivable do not include recorded amounts on allowance for bad debt on collection of claims admistration fee, in which the Debtor continues to assert rights of offset and other methods to effectuate collection. SCHEDULE C NOVEMBER 30, 2000 SNIG 3. Statement of Status of Payments to Secured Creditor and Lessors:
----------------------------------------------------------------------------------------------------------------------------------- Post-Petition Frequency of Payments Not Made Payments per Amount of ------------------------- Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount ----------------------------------------------------------------------------------------------------------------------------------- BancBoston Leasing Inc / Fleet Capital Leasing Monthly $235,337.00 12/1/00 None $ -- Citizens Leasing Corporation Monthly See BIG's schedule for details Dell Financial Services Monthly $ 8,931.85 12/20/00 2 $ 17,863.70 IKON Office Solutions, Inc. / IOS Capital Monthly $ 1,395.65 11/23/00, 11/15/00 3 $ 4,186.95 Neopost Monthly $ 858.80 11/29/2000, 12/10/00 2 $ 1,717.60 Neopost Quarterly $ 167.07 12/24/00 None $ -- Pitney Bowes Credit Corp. Monthly $ 4,810.67 12/10/00, 12/20/00, 12/1/00 2 $ 7,903.94 Pitney Bowes Credit Corp. Quarterly $ 7,394.15 12/10/00, 11/10/00 1 $ 1,512.53 Sharp Electronics Credit Co. Monthly $ 699.04 12/1/00 None $ -- Stringer business Systems Inc. Monthly $ 2,163.51* 12/1/00 3 $ 4,667.39 12/24/00, 12/6/00, 12/11/00, Toshiba America Information Sys. Monthly $ 8,170.39 12/1/00, 12/18/00 3 $ 21,942.26 Kilroy Realty Corp. Monthly $153,583.82 12/1/00 None $ -- Tiger Ventura County / c/o Sares-Regis Group Monthly $ 16,795.17 12/1/2000 - See Note A 3 $ 50,385.51 Equity Office Properties (Chicago, IL) Monthly $ 20,026.42 12/1/2000 - See Note A 3 $ 60,079.26 Bemiston Tower, Inc. / PM Realty Advisor Monthly $ 5,343.67 12/1/2000 - See Note A 3 $ 16,031.01 Trizec Kahn Properties Monthly $226,076.40 12/1/00 1 $ 226,076.40 Bettman Real Estate Management Monthly $ 1,932.33 12/1/00 See Note B MCLT LDB-7 Landmark Square Monthly $ 1,024.85 12/1/2000 - See Note A 3 $ 3,074.55 Insignia ESG Inc. - Biltmore Co. Monthly $ 12,437.51 12/1/2000 - See Note A 3 $ 37,312.53 Equity Office Properties (Texas) Monthly $ 3,942.39 12/1/2000 - See Note A 3 $ 11,827.17 -----------------------------------------------------------------------------------------------------------------------------------
Amounts above do not include bank loan in default, which are partially secured by stock of Superior National Insurance Group, Inc. and its subsidiaries. * Monthly payment is based on number of copies made for the previous month, therefore payment varies each month. Note A: Notice of abondonment of lease was mailed to the landlord to inform the landlord that the Debtor is abandoning the premises and relinquishing all rights of possession. Note B: Per the CLO, they have discontinued paying the lease as of 4/2000 and Superior has not occupied this office for a number of months. BIG 3. Statement of Status of Payments to Secured Creditors and Lessors:
------------------------------------------------------------------------------------------------------------------------------------ Post-Petition Frequency of Payments Not Made Payments per Amount of --------------------------- Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount ------------------------------------------------------------------------------------------------------------------------------------ Citizens Leasing Corporation Monthly $206,798.26 12/1/00 None $ -- Dell Financial Services Monthly $ 52,321.29 12/15/00 3 $ 88,221.85 Principal Management Corporation / GCI CAPITAL, INC. Monthly $ 30,827.28 12/1/00 1 $ 30,827.28 Mack Cali Realty / 500 Columbia Tpk Assoc., LLC Monthly $ 9,245.77 12/1/2000 - See Note A 3 $ 27,737.31 Transwestern CG Partner LLP / c/o Transwestern Property Co. Monthly $ 5,908.75 12/1/2000 - See Note A 3 $ 17,726.25 SP Environmental Systems / Union Pacific Railroad Co. Monthly $ 12,465.16 12/1/2000 - See Note A 3 $ 37,395.48 Kaiser-Francis Oil Company / c/o Realty Operating Company Monthly $ 3,778.00 12/1/2000 - See Note A 3 $ 11,334.00 Zodiac Development Monthly $ 9,454.31 12/1/00 2 $ 18,908.62 Koger Realty Services Inc. (Brentwood, TN) Monthly $ 2,418.60 12/1/00 See Note A & B Koger Realty Services Inc. (San Diego, CA) Monthly $ 26,600.89 12/1/00 3 $ 79,802.67 Prospect Park 29 NTL Income Realty / c/o PCS Realty Advisors Monthly $ 65,255.36 12/1/00 None $ -- Colonial Property Trust Monthly $ 5,433.98 12/1/00 See Note C Fults Realty Corporation Monthly $ 15,362.95 12/1/00 See Note B Woodland III Holding, LLC / c/o Wasatch Property Management Monthly $ 12,940.15 12/1/00 See Note C ------------------------------------------------------------------------------------------------------------------------------------
Amounts above do not include bank loan in default, which are partially secured by stock of Superior National Insurance Group, Inc. and its subsidiaries. Note A: Notice of abandonment of lease was mailed to the landlord to inform the landlord that the Debtor is abandoning the premises and relinquishing all rights of possession. Note B: Per the CLO, they are in the process of moving and/or selling the furniture & fixtures at this location and expect to vacate this premise by the end of 11/2000. The CLO has discontinued paying rent for this lease as of 7/2000. Note C: Per the CLO, they have discontinued paying the lease as of 4/2000 and Superior has not occupied this office for a number of months. SNIA 3. Statement of Status of Payments to Secured Creditors and Lessors:
------------------------------------------------------------------------------------------------------------------------------------ Post-Petition Frequency of Payments Not Made Payments per Amount of --------------------------- Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount ------------------------------------------------------------------------------------------------------------------------------------ NONE ------------------------------------------------------------------------------------------------------------------------------------
Amounts above do not include bank loan in default, which are partially secured by stock of Superior National Insurance Group, Inc. and its subsidiaries. SNIS 3. Statement of Status of Payments to Secured Creditors and Lessors:
------------------------------------------------------------------------------------------------------------------------------------ Post-Petition Frequency of Payments Not Made Payments per Amount of --------------------------- Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount ------------------------------------------------------------------------------------------------------------------------------------ NONE ------------------------------------------------------------------------------------------------------------------------------------
Superior National Insurance Group, Inc. in Bankruptcy SCHEDULE D Debtor in Possession Operating Report No. 8 Insurance Coverage - 5 As of November 30, 2000
----------------------------------------------------------------------------------------------------------------------------- Amount of Policy Premium Paid State Carrier Agent Coverage Exp. Date Thru Date ----------------------------------------------------------------------------------------------------------------------------- Arizona Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01 California State Compensation Insurance Fund Di Buduo & De Fendis Statutory 01-Jun-01 30-Nov-00 Colorado Pinnacol Assurance Di Buduo & De Fendis Statutory 01-Jun-01 01-Jun-01 Illinois Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01 Indiana Liberty Mutual Group Di Buduo & De Fendis Statutory 13-Jul-01 13-Jul-01 Kansas Travelers Insurance Di Buduo & De Fendis Statutory 11-Aug-01 11-Aug-01 Company Missouri Travelers Property & Casualty Di Buduo & De Fendis Statutory 02-Jun-01 02-Jun-01 New Jersey Granite State Insurance Company Di Buduo & De Fendis Statutory 02-Jun-01 02-Jun-01 Oklahoma State Insurance Fund Di Buduo & De Fendis Statutory 15-Nov-01 15-Nov-01 Pennsylvania State Workmen's Insurance Fund Di Buduo & De Fendis Statutory 03-Jun-01 03-Jun-01 Texas Texas W/C Insurance Fund Di Buduo & De Fendis Statutory 18-Jul-01 18-Jul-01
Note 1: The policies for Arkansas, Florida, Georgia, Louisiana, New Mexico, New York, Oregon, Tennessee, Utah, and Wisconsin were all cancelled in December 2000. Note 2: Within all of the policies identified above the following entities are covered for Workers' Compensation: SNIG, BIG, SNIA, and SNIS. November 30, 2000 Schedule E
Policy Exp. Premium paid Company Agent Type of Insurance Amount of Coverage Date thru date ------- ----- ----------------- ------------------ ----------- ----------- SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Commercial General Liability Package General Liability $1 million per occurence 11/13/01 11/13/01 $2 million aggregate Advertising Injury excluded Employee Benefit Liability $1 million per claim $2 million aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Automobile Liability $1 million 11/13/01 11/13/01 Medical $5,000 Uninsured Motorist $500,000 Physical Damage Actual value less $500 deductible SNIG, BIG, SNIS, & SNIA Carpenter Moore Directors & Officers (run-off) Reliance $5,000,000 5/1/03 5/1/03 Lloyd's of London $5,000,000 xs $5,000,000 Gulf Insurance Company $10,000,000 xs $10,000,000 Executive Risk Indemnity $10,000,000 xs $20,000,000 Philadelphia Indemnity $10,000,000 xs $30,000,000 SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Commercial Umbrella $10 million per occurrence 11/13/01 11/13/01 $10 million aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Excess Liability $10 million per occurence 11/13/01 11/13/01 $10 million aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Difference in Condition $10 million per occurence 1/22/01 1/22/01 $10 million aggregate *$25,000 deductible, minimum and 5% of total insurable property SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Difference in Condition Excess $10 million 1/22/01 1/22/01 SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Accident Policy (Life/Travel) $1 million to $3 million 1/15/01 1/15/01 (depends on rank of officer) BIG only DiBudio & DeFendis Professional Liability Run Off $10 million per loss 12/10/04 12/10/04 BIG companies only/acts b/f & in the aggregate 12/10/99 *$500,000 deductible
Note: The Debtor is currently in the process of obtaining coverage on the following policies that expired on 12/10/2000 (Employer Practice Liability, Fiduciary Liability, Fidelity Bond, and Professional Liablity Run off - SNIG only) SCHEDULE F NOVEMBER 30, 2000 SNIG, BIG, SNIS, SNIA
---------------------------------------------------------------------------------------------------------------------- Type Post-Petition Name of Professional Professional Unpaid Total* ---------------------------------------------------------------------------------------------------------------------- Quinn Emanuel Urquhart Oliver & Hedges LLP Special Litigation Counsel $670,119 See Note A Riordan & McKenzie Corporate Counsel $ 60,602 See Note A Christopher M. Maisel Access Facilitator $381,937 See Note A Paul, Weiss, Rifkind, Wharton & Garrison $ 62,562 See Note A Tillinghast-Towers, Perrin Actuaries $ 32,261 See Note A Latham & Watkins Counsel for Official Committee of Unsecured Creditors $224,351 See Note A ----------------------------------------------------------------------------------------------------------------------
* Unpaid amount is through 9/30/00, with the exception of Quinn Emanuel which is through 10/31/00 Note A - All fees were approved for payment by the Bankruptcy Court in December 2000 and subsequently paid in December 2000 and January 2001, except Riordan & McKenzie in which fees have been paid through retainer.