EX-99.89 99 a2042579zex-99_89.txt EXHIBIT 99.89 -------------------------------------------------------------------------------- OFFICE OF THE UNITED STATES TRUSTEE -------------------------------------------------------------------------------- IN RE: ) DEBTOR IN POSSESSION OPERATING REPORT ) BUSINESS INSURANCE GROUP ) REPORT NUMBER 10 Page 1 of 3 ) FOR THE PERIOD FROM: 01-Jan-01 DEBTOR ) TO: 31-Jan-01 ___________________________________) _________________________________________ CHAPTER 11 CASE NO. SV00-14101-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 Sales 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.10 -------------------------------------------------------------------------------- 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 $0 Gross Sales for Period Subject to Sales tax $0
----------------------------------------------------------- Post Petition Taxes Date Paid Amount Paid * Still Owing ----------------------------------------------------------- Federal Payroll and Withholding Taxes N/A $0 N/A State Payroll and Withholding Taxes N/A $0 N/A State Sales and Use Tax N/A $0 N/A Real Property Taxes N/A $0 N/A -----------------------------------------------------------
* 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. 10 -------------------------------------------------------------------------------- 6. Questions: A. Has the Debtor provided to any 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 ---------------------------------------------------------------------------------------------------------------- 12/31/2000 $5,248,340.00 $10,000.00 $0.00 $10,000.00 Note A ----------------------------------------------------------------------------------------------------------------
Note A - 4th quarter trustee fee was paid on 2/12/01. 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 3/7/01 Signed /s/ Alex Corbett ------ ------------------------- SCHEDULE A SNIG, BIG, SNIA and SNIS Schedule of Operations One Month ended January 31, 2001 [Bankruptcy filed April 26, 2000] (unaudited)
(In thousands) Consolidation SNIG BIG SNIA SNIS Elimination Total ------- ------- ------- ------- ----------- ------------- Revenues: Commission Income $ -- $ -- $ -- $ 25 $ -- $ 25 Net investment income 7 (6) 3 92 -- 96 ------- ------- ------- ------- ------- ------- Total Revenues 7 (6) 3 117 -- 121 ------- ------- ------- ------- ------- ------- Expenses Interest expenses 1,096 -- -- -- -- 1,096 Bad debt expense -- -- -- (A) (5) (A) -- (5) General and administrative Other (139) -- 233 1,136 -- 1,230 ------- ------- ------- ------- ------- ------- Total Expenses 957 -- 233 1,131 -- 2,321 ------- ------- ------- ------- ------- ------- Income (loss) before income taxes and preferred securities dividends and accretion (950) (6) (230) (1,014) -- (2,200) Income tax (benefit) expense -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- Income (loss) before preferred securities dividends and accretion (950) (6) (230) (1,014) -- (2,200) Preferred securities dividends and accretion (1,092) -- -- -- -- (1,902) Expenses not related to business operations: Legal and Professional Fees (126) (2) -- -- -- (128) Other non-operating expenses (13) -- (5) (10) -- (28) ------- ------- ------- ------- ------- ------- (2,181) (8) (235) (1,024) -- (3,448) Equity in net income (loss) from subsidiaries (1,272) (1,264) -- -- 2,531 (5) ------- ------- ------- ------- ------- ------- Net (Loss) Income $(3,453) $(1,272) $ (235) $(1,024) $ 2,531 $(3,453) ======= ======= ======= ======= ======= =======
(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 Janury 31, 2001
Superior National Insurance Group -------------------------------------- ------------------------------------- Non-Intercompany Accounts Intercompany Accounts -------------------------------------- ------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable -------------------------------------- ------------------------------------- Current Under 30 days 285,163 -- -- 832,629 Overdue 31-60 days -- 99,166 5,237,080 177,616(D) Overdue 61-90 days 7,000 36,840 -- 3,581 Overdue 91-120 days 512,894 -- -- 143,001 Overdue 121+ days 32,728 15,395 1 500,009 -------------------------------------- ------------------------------------- Total $ 837,786 $ 151,400[A] $5,237,081 $ 1,656,835 -------------------------------------- ------------------------------------- Business Insurance Group -------------------------------------- ------------------------------------- Non-Intercompany Accounts Intercompany Accounts -------------------------------------- ------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable -------------------------------------- ------------------------------------- Current Under 30 days 2,307 -- 11,000 -- Overdue 31-60 days -- -- -- 5,237,080(D) Overdue 61-90 days -- -- -- -- Overdue 91-120 days -- -- -- -- Overdue 121+ days -- 601,265 -- 14,963,854 -------------------------------------- ------------------------------------- Total $ 2,307 $ 601,265 $ 11,000 $20,200,934 -------------------------------------- ------------------------------------- Superior National Insurance Services -------------------------------------- ------------------------------------- Non-Intercompany Accounts Intercompany Accounts -------------------------------------- ------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable -------------------------------------- ------------------------------------- Current Under 30 days 141,165 64,313 650,932 12,491 Overdue 31-60 days 18,963 382,094 (0) 18,655 Overdue 61-90 days 34,359 156,488 (0) 32,445 Overdue 91-120 days 13,605 690,714 (0) 2,421 Overdue 121+ days 755,238 11,163,378 -- 657,624 -------------------------------------- ------------------------------------- Total $ 963,330 $12,456,988[B] $ 650,931 $ 723,636 -------------------------------------- ------------------------------------- Superior National Insurance Administrators -------------------------------------- ------------------------------------- Non-Intercompany Accounts Intercompany Accounts -------------------------------------- ------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable -------------------------------------- ------------------------------------- Current Under 30 days 60,524 -- 183,388 -- Overdue 31-60 days (18) -- 196,271 -- Overdue 61-90 days -- -- 36,026 -- Overdue 91-120 days -- -- 145,423 -- Overdue 121+ days 89,789 6,377,198 829,569 98,383 -------------------------------------- ------------------------------------- Total $ 150,295 $ 6,377,198[C] $1,390,677 $ 98,383 -------------------------------------- ------------------------------------- Consolidated -------------------------------------- ------------------------------------- Non-Intercompany Accounts Intercompany Accounts -------------------------------------- ------------------------------------- Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable -------------------------------------- ------------------------------------- Current Under 30 days 489,160 64,313 845,320 845,120 Overdue 31-60 days 18,945 481,260 5,433,351 5,433,351 Overdue 61-90 days 41,359 193,327 36,026 36,026 Overdue 91-120 days 526,500 690,714 145,422 145,422 Overdue 121+ days 877,755 18,157,236 829,570 16,219,870 -------------------------------------- ------------------------------------- Total $1,953,718 $19,586,850 $7,289,689 $22,679,789 -------------------------------------- -------------------------------------
[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. [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 JANUARY 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 B IKON Office Solutions Inc. / IOS Capital Monthly $ 1,395.65 11/23/00, 11/15/00 See Note B Pitney Bowes Credit Corp. Monthly $ 4,810.67 12/10/00, 12/20/00, 12/1/00 See Note B Pitney Bowes Credit Corp. Quarterly $ 7,394.15 12/10/00, 11/10/00 See Note B Stringer Business Systems Inc. Monthly $ 2,163.51* 12/1/2000 See Note B 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 B Trizec Kahn Properties Monthly $226,076.40 2/1/2001 See Note C Bettman Real Estate Management Monthly $ 1,932.33 2/1/2001 See Note A & 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. * Monthly payment is based on number of copies made for the previous month, therefore payment varies each month. Note A: 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. Note B: 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. Note C: These leases were automatically deemed rejected by operation of law. 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 12/12/2000 See Note C Zodiac Development Monthly $ 9,454.31 1/1/2001 See Note D Koger Realty Services Inc. (San Diego, CA) Monthly $ 26,600.89 1/1/2001 See Note D Colonial Property Trust Monthly $ 5,433.98 1/1/2001 See Note B & Note D Fults Realty Corporation Monthly $ 15,362.95 1/1/2001 See Note A & Note D Woodland III Holding, LLC / c/o Wasatch Property Management Monthly $ 12,940.15 1/1/2001 See Note B & Note D ------------------------------------------------------------------------------------------------------------------------------------
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: 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 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. Note C: 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. Note D: These leases were automatically deemed rejected by operation of law. 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 January 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 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 Workrmen'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 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. January 31,2001 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 11/13/2001 11/13/2001 $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 11/13/2001 11/13/2001 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 5/1/2003 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, SNIS, & SNIA DiBudio & DeFendis Employer Practice Liability $1 million per loss 12/10/2001 12/10/2001 & in the aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Fiduciary Liability $5 million per loss 12/10/2001 12/10/2001 & in the aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Commercial Umbrella $10 million per occurence 11/13/2001 11/13/2001 $10 million aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Excess Liability $10 million per occurence 11/13/2001 11/13/2001 $10 million aggregate SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Accident Policy (Life/Travel) $1 million to $3 million 1/15/2002 1/15/2002 (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 & in the aggregate 12/10/99 * $500,000 deductible
SCHEDULE F JANUARY 31, 2001 SNIG, BIG, SNIS, SNIA
---------------------------------------------------------------------------------------------------------------------- Type Post-Petition Name of Professional Professional Unpaid Total ---------------------------------------------------------------------------------------------------------------------- Paul, Weiss, Rifkind, Wharton & Garrison Legal fees $267,295 See Note A Tillinghast-Towers, Perrin Actuaries $ 32,261 See Note B Latham & Watkins Counsel for Official Committee of Unsecured Creditors $ 40,100 Steve Elrige Tax consulting $ 21,334 Quinn Emanuel Urquhart Oliver & Hedges LLP Legal fees $194,308 Tharpe & Howell Legal fees $ 1,163 Mannat Phelps Legal fees $ 29,606 KPMG Peat Marwick Audit & consulting fees $ 57,714 Christopher Maisel Facilitator fees $125,000 See Note C ----------------------------------------------------------------------------------------------------------------------
Note A - $42,408.81 was subsequently paid on February 2, 2001. Note B - Fees were approved for payment by the Bankruptcy Court in December 2000 and subsequently paid on February 16, 2001. Note C - Outstanding fees as of January 31, 2001 are estimated and provided by Christopher Maisel.