EX-99.68 78 a2042579zex-99_68.txt EXHIBIT 99.68 ------------------------------------------------------------------------------- OFFICE OF THE UNITED STATES TRUSTEE ------------------------------------------------------------------------------- IN RE: ) DEBTOR IN POSSESSION OPERATING REPORT ) SN INSURANCE ADMINISTRATORS ) REPORT NUMBER 12 Page 1 of 3 ) FOR THE PERIOD FROM: 01-Mar-01 DEBTOR) TO: 31-Mar-01 ) ------------------------------------ CHAPTER 11 CASE NO. SV00-14102-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 Revenues (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, Photocopies, 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. 12 ------------------------------------------------------------------------------ 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
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 $36,798 Gross Sales for Period Subject to Sales Tax $0
Post Petition Taxes Date Paid Amount Paid* Still Owing ----------------- ------------ ------------------- Federal Payroll and Withholding Taxes 3/15/01 & 3/31/01 $10,080 0 State Payroll and Withholding Taxes 3/15/01 & 3/31/01 $1,396 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. 12 ------------------------------------------------------------------------------- Page 3 of 3 6. Questions: A. Has the Debtor provided to any officers, directors, shareholders, or other principals compensation without the approval of the Office of the Unites 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 Unites States Trustee every calendar quarter)
Quarterly Quarterly Disbursements Quarterly Quarterly Period Ending for Quarter Fee Date Paid Amount Paid Check No. Fee Still Owing ------------- ------------- --------- --------- ----------- --------- --------------- 3/31/2001 $132,485.00 $750.00 $750.00 NOTE A
NOTE A - 1st quarter 2001 trustee fee subsequently paid on 4/23/01. 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: 5/1/01 Signed: /s/ Alex Corbett ----------------------- ----------------------------------- SCHEDULE A SNIG, BIG, SNIA and SNIS SCHEDULE OF OPERATIONS ONE MONTH ENDED MARCH 31, 2001 [BANKRUPTCY FILED APRIL 26, 2000] [UNAUDITED]
(In thousands) CONSOLIDATED SNIG BIG SNIA SNIS ELIMINATION TOTAL ----------- ----------- ----------- ----------- ------------- -------------- Revenues: Commission income $ -- $ -- $ -- $ (382) $ -- $ (382)(C) Net investment income 43 (6) 3 79 -- 119 ----------- ----------- ----------- ----------- ------------- -------------- TOTAL REVENUES 43 (6) 3 (303) -- (263) ----------- ----------- ----------- ----------- ------------- -------------- Expenses: Interest expense 987 -- -- -- -- 987 Bad debt expense -- -- --(A) (382)(A) -- (382) General and administrative Other (475) -- 98 492 -- 115 (B) ----------- ----------- ----------- ----------- ------------- -------------- TOTAL EXPENSES 512 -- 98 110 -- 720 ----------- ----------- ----------- ----------- ------------- -------------- INCOME (LOSS) BEFORE INCOME TAXES AND PREFERRED SECURITIES DIVIDENDS AND ACCRETION (469) (6) (95) (413) -- (983) Income tax (benefit) expense 13 -- 1 1 -- 15 ----------- ----------- ----------- ----------- ------------- -------------- INCOME (LOSS) BEFORE PREFERRED SECURITIES DIVIDENDS AND ACCRETION (482) (6) (96) (414) -- (998) Preferred securities dividends and accretion (1,092) -- -- -- -- (1,092) Expenses not related to business operations: Legal and Professional Fees (474) -- -- -- -- (474) Other non-operating expenses (5) -- -- (8) -- (13) ----------- ----------- ----------- ----------- ------------- -------------- (2,053) (6) (96) (422) -- (2,577) Equity in net income (loss) from subsidiaries (515) (509) -- -- 1,033 9 ----------- ----------- ----------- ----------- ------------- -------------- NET (LOSS) INCOME $ (2,568) (515) (96) (422) 1,033 (2,568) =========== =========== =========== =========== ============= ==============
(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. (B) Amount reflects a reduction of a $365K accrual originally recorded in February 2001. (C) Amount is reflective of a reduction in billed premiums from Front Companies. SCHEDULE B SUPERIOR NATIONAL INSURANCE GROUP, INC. IN BANKRUPTCY AGING OF ACCOUNTS PAYABLE AND RECEIVABLE AS OF MARCH 31, 2001
SUPERIOR NATIONAL INSURANCE GROUP NON-INTERCOMPANY ACCOUNTS INTERCOMPANY ACCOUNTS -------------------------------------- ------------------------------------- ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ---------------- ------------------- ---------------- ------------------- Current Under 30 days 421,811 -- -- 292,129 Overdue 31 - 60 days 670,102 15,000 -- 1,043,941 Overdue 61 - 90 days (636) -- -- 815,965 Overdue 91 - 120 days -- 99,166 5,237,080 177,616 (D) Overdue 121 + days 552,622 30,388 1 646,591 ---------------- ------------------- ---------------- ------------------- Total $ 1,643,900 $ 144,553 [A] $ 5,237,081 $ 2,976,241 ---------------- ------------------- ---------------- ------------------- BUSINESS INSURANCE GROUP NON-INTERCOMPANY ACCOUNTS INTERCOMPANY ACCOUNTS -------------------------------------- ------------------------------------- ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ---------------- ------------------- ---------------- ------------------- Current Under 30 days 700 -- -- -- Overdue 31 - 60 days -- -- 11,000 -- Overdue 61 - 90 days -- -- 11,000 -- Overdue 91 - 120 days -- -- -- 5,237,080(D) Overdue 121 + days -- 601,265 -- 14,963,854 ---------------- ------------------- ---------------- ------------------- Total $ 700 $ 601,265 $ 22,000 $ 20,200,934 ---------------- ------------------- ---------------- ------------------- SUPERIOR NATIONAL INSURANCE SERVICES NON-INTERCOMPANY ACCOUNTS INTERCOMPANY ACCOUNTS -------------------------------------- ------------------------------------- ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ---------------- ------------------- ---------------- ------------------- Current Under 30 days 195,485 23,810 241,850 885 Overdue 31 - 60 days 10,839 56,312 848,208 12,081 Overdue 61 - 90 days 49,323 74,161 634,067 12,491 Overdue 91 - 120 days 18,863 362,237 (0) 18,655 Overdue 121 + days 772,296 11,609,906 (0) 692,490 ---------------- ------------------- ---------------- ------------------- Total $ 1,046,807 $ 12,126,426[B] $ 1,724,125 $ 736,602 ---------------- ------------------- ---------------- ------------------- SUPERIOR NATIONAL INSURANCE GROUP ADMINISTRATORS NON-INTERCOMPANY ACCOUNTS INTERCOMPANY ACCOUNTS -------------------------------------- ------------------------------------- ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ---------------- ------------------- ---------------- ------------------- Current Under 30 days 63,339 -- 51,164 -- Overdue 31 - 60 days -- -- 196,814 -- Overdue 61 - 90 days (0) -- 183,388 -- Overdue 91 - 120 days -- -- 196,271 -- Overdue 121 + days 89,789 6,385,900 1,011,017 98,383 ---------------- ------------------- ---------------- ------------------- Total $ 153,127 $ 6,385,900[C] $ 1,638,654 $ 98,383 ---------------- ------------------- ---------------- ------------------- CONSOLIDATED NON-INTERCOMPANY ACCOUNTS INTERCOMPANY ACCOUNTS -------------------------------------- ------------------------------------- ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE ---------------- ------------------- ---------------- ------------------- Current Under 30 days 681,335 23,810 293,014 293,014 Overdue 31 - 60 days 680,941 71,312 1,056,022 1,056,022 Overdue 61 - 90 days 48,688 74,161 828,456 828,456 Overdue 91 - 120 days 18,863 461,402 5,433,351 5,433,351 Overdue 121 + days 1,414,707 18,627,458 1,011,019 16,401,318 ---------------- ------------------- ---------------- ------------------- Total $ 2,844,534 $ 19,258,144 $ 8,621,861 $ 24,012,160 ---------------- ------------------- ---------------- -------------------
[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 administration fee, in which the Debtor continues to assert rights of offset and other methods to effectuate collection. [D] Amounts include a payment of $5.4 million pursuant to an Order Authorizing Release of Escrowed Funds to the Bank Group Pursuant to Stipulation dated November 9, 2000. The $5.4 million was paid from BIG for interest expense accrued on SNIG. SCHEDULE C MARCH 31, 2001 SNIG 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 --------------------------------------------------------------------------------------------------------------------------- Dell Financial Services Monthly $ 8,931.85 12/20/2000 SEE NOTE A IKON Office Solutions Inc. / IOS Capital Monthly $ 1,395.65 11/23/00, 11/15/00 SEE NOTE A Pitney Bowes Credit Corp. Monthly $ 4,810.67 12/10/00, 12/20/00, 12/1/00 SEE NOTE A Pitney Bowes Credit Corp. Quarterly $ 7,394.15 12/10/00, 11/10/00 SEE NOTE A Stringer Business Systems Inc Monthly $ 2,163.51* 12/1/2000 SEE NOTE A 12/24/00,12/6/00,12/11/00, Toshiba America Information Sys. Monthly $ 8,170.39 12/1/00, 12/18/00 SEE NOTE A ---------------------------------------------------------------------------------------------------------------------------
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: THESE LEASES WERE WITHDRAWN FROM THE MOTION FILED ON JANUARY 19, 2001 BASED UPON THE REPRESENTATION THAT THE CLO WILL REMAIN CURRENT ON ALL MONETARY OBLIGATIONS UNDER THE LEASES UNTIL THE DEBTORS RECEIVE INSTRUCTION FROM THE CLO ON THE ASSUMPTION OR REJECTION OF THESE LEASES BY APRIL 15, 2001. 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 --------------------------------------------------------------------------------------------------------------------------- Dell Financial Services Monthly $ 52,321.29 12/15/2000 SEE NOTE A ---------------------------------------------------------------------------------------------------------------------------
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: THIS LEASE WAS WITHDRAWN FROM THE MOTION FILED ON JANUARY 19, 2001 BASED UPON THE REPRESENTATION THAT THE CLO WILL REMAIN CURRENT ON ALL MONETARY OBLIGATIONS UNDER THE LEASE UNTIL THE DEBTORS RECEIVE INSTRUCTION FROM THE CLO ON THE ASSUMPTION OR REJECTION OF THIS LEASE BY APRIL 15, 2001. 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 ---------------------------------------------------------------------------------------------------------------------------
Amounts above do not include bank loan in default, which are partially secured by stock of Superior National Insurance Group, Inc. and its subsidiaries. Superior National Insurance Group, Inc. in Bankruptcy SCHEDULE D Debtor in Possession Insurance Coverage As of March 31, 2001
-------------------------------------------------------------------------------------------------------------- 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 Arkansas 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 01-Jun-01 Colorado Pinnacol Assurance Di Buduo & De Fendis Statutory 01-Jun-01 01-Jun-01 Georgia Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01 Illinois Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01 Kansas Travelers Insurance Company Di Buduo & De Fendis Statutory 11-Aug-01 11-Aug-01 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 Workmens' 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 Virginia Travelers Insurance Company Di Buduo & De Fendis Statutory 11-Aug-01 11-Aug-01
Note 1: The policies for Florida, Indiana, Louisiana, New Mexico, New York, Oregon, Tennessee, Utah, and Wisconsin were all requested to be 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. Note 3: The policies for Arkansas, Arizona, Georgia, & Illinois are all covered on one policy, which is inforce, even though AR & GA offices are closed. Note 4: A Virginia employee was added to the Kansas policy. MARCH 31, 2001 SCHEDULE E
POLICY PREMIUM PAID COMPANY AGENT TYPE OF INSURANCE AMOUNT OF COVERAGE EXP. DATE THRU DATE ------------ ------------------ ------------------------------------- -------------------------- ---------- ------------ SNIG, BIG, DiBudio & DeFendis COMMERCIAL GENERAL LIABILITY PACKAGE SNIS, & SNIA General Liability $1 million per occurrence 11/13/2001 11/13/2001 $2 million aggregate Advertising injury excluded Employee Benefit Liability $1 million per claim $1 million aggregate SNIG, BIG, DiBudio & DeFendis AUTOMOBILE (OWNED) SNIS, & SNIA Liability $1 million 3/22/2001 3/22/2001 Medical $5,000 Uninsured Motorist $500,000 Physical Damage Actual value less $500 deductible SNIG, BIG, DiBudio & DeFendis AUTOMOBILE (NON-OWNED) SNIS, & SNIA Liability $1 million 11/13/2001 11/13/2001 Physical Damage/Comp/Collision $30,000 $100 deductible comp/$250 collision SNIG, BIG, Carpenter Moore DIRECTORS & OFFICERS (RUN-OFF) SNIS, & SNIA Reliance $5,000,000 5/1/2003 5/1/2003 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, DiBudio & DeFendis EMPLOYER PRACTICE LIABILITY (RUN OFF) $1 million per loss 12/10/2001 12/10/2001 SNIS, & SNIA EXTENDED REPORTING PERIOD & in the aggregate SNIG, BIG, DiBudio & DeFendis EMPLOYER PRACTICE LIABILITY $1 million per loss 1/15/2002 1/15/2002 SNIS, & SNIA & in the aggregate SNIG, BIG, DiBudio & DeFendis FIDUCIARY LIABILITY (RUN OFF) $5 million per loss 12/10/2001 12/10/2001 SNIS, & SNIA & in the aggregate SNIG, BIG, DiBudio & DeFendis COMMERICIAL UMBRELLA $10 million per occurrence 11/13/2001 11/13/2001 SNIS, & SNIA $10 million aggregate SNIG, BIG, DiBudio & DeFendis EXCESS LIABILITY $10 million per occurrence 11/13/2001 11/13/2001 SNIS, & SNIA $10 million aggregate SNIG, BIG, DiBudio & DeFendis ACCIDENT POLICY (LIFE/TRAVEL) $1 million to $3 million 1/15/2002 1/15/2002 SNIS, & SNIA (depends on rank of officer) BIG ONLY DiBudio & DeFendis PROFESSIONAL LIABILITY RUN OFF $10 million per loss 12/10/2004 12/10/2004 BIG COMPANIES ONLY/acts b/f 12-10-99 & in the aggregate *$500,000 deductible
SCHEDULE F MARCH 31, 2001 SNIG, BIG, SNIS, SNIA
---------------------------------------------------------------------------------------------------------------------- Type Post-Petition Name of Professional Professional Unpaid Total ---------------------------------------------------------------------------------------------------------------------- Paul, Weiss, Rifkind, Wharton & Garrison Legal fees $ 86,394 Tillinghast-Towers, Perrin Actuaries $ - Latham & Watkins Counsel for Official Committee of Unsecured Creditors $189,374 Steve Eldrige Tax consulting $ 9,860 Quinn Emanuel Urquhart Oliver & Hedges LLP Special litigation counsel $771,161 Tharpe & Howell Legal fees $ 1,163 Mannat Phelps Legal fees $ 29,606 KPMG Peat Marwick Audit & consulting fees $279,036 Note A Christopher Maisel Facilitator fees $209,300 Note B Riordan & McKinzie Corporate counsel $174,928 Pachulski, Stang, Ziehl, Young & Jones LLP General bankruptcy counsel $302,081 Note B
Note A - Payments of $34,765, $22,949, and $12,493 were paid on 1/1/01, 1/20/01, and 3/19/01, respectively. Additionally, $97,250 of fees and expenses were applied against the retainer. Note B - Amount represents fees & expenses through February 28, 2001.