8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 15, 2011

FIRSTFED FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Delaware	1-9566	95-4087449
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

10900 Wilshire Boulevard, Suite 850 Los Angeles, California	90024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 405-7212

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Item 8.01 Other Events.

On July 15, 2011, FirstFed Financial Corp. (the “Company”) filed its monthly operating report for the period beginning June 1, 2011 and ending June 30, 2011 (the “June Report”) with the United States Bankruptcy Court for the Central District of California (the “Bankruptcy Court”). The June Report is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference herein.

Cautionary Statements Regarding June Report

The June Report is limited in scope, covers only a one-month time period and has been prepared solely for the purpose of the Company’s compliance with the monthly reporting requirements of the Bankruptcy Court. The June Report contains financial information that (i) has not been audited or reviewed by an independent registered public accounting firm; (ii) is not presented in accordance with generally accepted accounting principles in the United States of America; and (iii) may be subject to future reconciliation, adjustments or other modification or amendment. The information contained in the June Report has been prepared in accordance with applicable laws and regulations under Chapter 11 of Title 11 of the United States Code and is not to be used for investment purposes. There can be no assurance that the June Report is complete. The Company may amend or otherwise change the information contained in the June Report at a future date. The operating results set forth in the June Report should not be viewed as indicative of the Company’s future results.

The June Report should under no circumstances be relied upon or viewed as a substitute, supplement or replacement for financial information that is filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The June Report contains information for periods which may be shorter or otherwise different from those contained in reports required pursuant to the Exchange Act. The June Report does not include footnotes that would ordinarily be contained in the financial statements in the Company’s quarterly and annual reports pursuant to the Exchange Act.

Forward-Looking Statements

This Current Report on Form 8-K and the exhibit hereto may contain certain forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Monthly Operating Report for the period beginning June 1, 2011 and ending June 30, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRSTFED FINANCIAL CORP.
	(Registrant)
July 20, 2011	By:	/S/    CARL W. MCKINZIE
		Carl W. McKinzie
		Chief Executive Officer

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Monthly Operating Report for the period beginning June 1, 2011 and ending June 30, 2011.

EX-99.1

EXHIBIT 99.1

UNITED STATES DEPARTMENT OF JUSTICE

OFFICE OF THE UNITED STATES TRUSTEE

CENTRAL DISTRICT OF CALIFORNIA

In Re: FirstFed Financial Corp	CHAPTER 11 (BUSINESS)
	Case Number:	2:10-bk-12927-ER
	Operating Report Number:	18
Debtor(s).	For the Month Ending:	June 30, 2011

I. CASH RECEIPTS AND DISBURSEMENTS

A. (GENERAL ACCOUNT*)

1. TOTAL RECEIPTS PER ALL PRIOR GENERAL ACCOUNT REPORTS		228,570.55
2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR GENERAL ACCOUNT REPORTS		827,167.45
3. BEGINNING BALANCE:		3,243,290.14
4. RECEIPTS DURING CURRENT PERIOD:
Accounts Receivable—Post-filing
Accounts Receivable—Pre-filing
General Sales
**Other—Rent deposit refund	0.00
TOTAL RECEIPTS THIS PERIOD:		0.00
5. BALANCE:		3,243,290.14
6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
Transfers to Other DIP Accounts (from page 2)	0.00
Disbursements (from page 2)	50,763.66
TOTAL DISBURSEMENTS THIS PERIOD:***		50,763.66
7. ENDING BALANCE:		3,192,526.48

8. General Account Number(s):	xxxxxxxxx
	Union Bank
Depository Name & Location:	445 South Figueroa
	Los Angeles, CA 90071

* All receipts must be deposited into the general account.

** Include receipts from the sale of any real or personal property out of the ordinary course of business; attach an exhibit specifying what was sold, to whom, terms, and date of Court Order or Report of Sale.

*** This amount should be the same as the total from page 2.

TOTAL DISBURSEMENTS FROM GENERAL ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number		Payee or DIP account	Purpose	*Amount Transfered		**Amount Disbursed		Amount
6/1/2011		1108	Registrar & Transfer Company	May Services				684.10		684.10
6/9/2011		1109	Landau, Gottfried, & Berger	Legal-Bankruptcy Counsel				18,896.80		18,896.80
6/9/2011		1110	Manatt, Phelps & Phillips, LLP	Legal-Special Counsel				10,630.44		10,630.44
6/9/2011		1111	Carl W McKinzie	Professional Svcs. (Jun 2011)				16,000.00		16,000.00
6/10/2011		EFT	The Hartford	payroll costs, workman’s comp				53.00		53.00
6/14/2011		1112	Chris Damore	Accounting Svcs May-11				297.50		297.50
6/14/2011		1113	RR Donnelley	8k Filing on 04/15/11				1,067.00		1,067.00
6/20/2011		1114	The Hartford	Business Owners Insurance				203.00		203.00
6/24/2011		EFT	The Hartford	payroll costs, workman’s comp				150.00		150.00
6/30/2011		1115	RR Donnelley	8k Filing on 06/15/11				889.00		889.00
6/30/2011		1116	Registrar & Transfer Company	Jun Services				392.82		392.82
6/30/2011		1117	Riordon, Lewis & Haden	Rent Jul-11				1,500.00		1,500.00
				TOTAL DISBURSEMENTS THIS PERIOD:		—		50,763.66		50,763.66

* Fill in amounts in this column if they are TRANSFERS to another DIP account (e.g. Payroll or Tax); the “amount” column will be filled in for you.

** Fill in amounts in this column if they are DISBURSEMENTS to outside payees; the “amount” column will be filled in for you.

GENERAL ACCOUNT

BANK RECONCILIATION

Bank statement Date:			6/30/2011		Balance on Statement:	$	3,249,339.07
Plus deposits in transit (a):
		Deposit Date		Deposit Amount
TOTAL DEPOSITS IN TRANSIT							0.00
Less Outstanding Checks (a):
	Check Number	Check Date		Check Amount
	1115		6/30/2011		889.00
	1116		6/30/2011		392.82
	1117		6/30/2011		1,500.00
TOTAL OUTSTANDING CHECKS:							2,781.82
Bank statement Adjustments:
Explanation of Adjustments-
ADJUSTED BANK BALANCE:						$	3,246,557.25

* It is acceptable to replace this form with a similar form

** Please attach a detailed explanation of any bank statement adjustment

I. CASH RECEIPTS AND DISBURSEMENTS

B. (PAYROLL ACCOUNT)

1.	TOTAL RECEIPTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS		0.00
2.	LESS: TOTAL DISBURSEMENTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS		386,337.27
3.	BEGINNING BALANCE:		113,662.73
4.	RECEIPTS DURING CURRENT PERIOD:
5.	BALANCE:		113,662.73
6.	LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD TOTAL DISBURSEMENTS THIS PERIOD:***		10,820.67
7.	ENDING BALANCE:		102,842.06
8.	PAYROLL Account Number(s):
		xxxxxxxxxx
	Depository Name & Location:	Union Bank
		445 South Figueroa
		Los Angeles, CA 90071

TOTAL DISBURSEMENTS FROM PAYROLL ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number		Payee	Purpose	Amount
6/30/2011		EFT	Brian Argrett	Jul 2011 Salary (net of payroll taxes)		7,343.34
6/30/2011		EFT	various governments	Payroll Taxes -Jul 2011		3,421.66
6/30/2011		EFT	CBIZ	Payroll Processing Charge		55.67
				Jul 2011 payroll paid on 06/30/11 by payroll processor
				TOTAL DISBURSEMENTS THIS PERIOD:		10,820.67

PAYROLL ACCOUNT

BANK RECONCILIATION

	Bank statement Date:		6/30/2011		Balance on Statement:	$	102,842.06
Plus deposits in transit (a):
			Deposit Date	Deposit Amount
TOTAL DEPOSITS IN TRANSIT							0.00
Less Outstanding Checks (a):
		Check Number	Check Date	Check Amount
TOTAL OUTSTANDING CHECKS:							0.00
Bank statement Adjustments:
Explanation of Adjustments-
ADJUSTED BANK BALANCE:						$	102,842.06

* It is acceptable to replace this form with a similar form

** Please attach a detailed explanation of any bank statement adjustment

I. CASH RECEIPTS AND DISBURSEMENTS

C. (TAX ACCOUNT)

1.	TOTAL RECEIPTS PER ALL PRIOR TAX ACCOUNT REPORTS		0.00
2.	LESS: TOTAL DISBURSEMENTS PER ALL PRIOR TAX ACCOUNT REPORTS		0.00
3.	BEGINNING BALANCE:		10,000.00
4.	RECEIPTS DURING CURRENT PERIOD:
5.	BALANCE:		10,000.00
6.	LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD TOTAL DISBURSEMENTS THIS PERIOD:***		0.00
7.	ENDING BALANCE:		10,000.00
8.	TAX Account Number(s):	xxxxxxxxx
		Union Bank
	Depository Name & Location:	445 South Figueroa
		Los Angeles, CA 90071

TOTAL DISBURSEMENTS FROM TAX ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee	Purpose	Amount
		NONE			none
			TOTAL DISBURSEMENTS THIS PERIOD:		0.00

TAX ACCOUNT

BANK RECONCILIATION

	Bank statement Date:	6/30/2011	Balance on Statement:	$	10,000.00
Plus deposits in transit (a):
		Deposit Date	Deposit Amount
TOTAL DEPOSITS IN TRANSIT					0.00
Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
TOTAL OUTSTANDING CHECKS:					0.00
Bank statement Adjustments:
Explanation of Adjustments-
ADJUSTED BANK BALANCE:				$	10,000.00

* It is acceptable to replace this form with a similar form

** Please attach a detailed explanation of any bank statement adjustment

I. D SUMMARY SCHEDULE OF CASH

ENDING BALANCES FOR THE PERIOD:

(Provide a copy of monthly account statements for each of the below)

	General Account:		3,192,526.48
	Payroll Account:		102,842.06
	Tax Account:		10,000.00
*Other Accounts:
*Other Monies:
	**Petty Cash (see below):		0.00
TOTAL CASH AVAILABLE:				3,305,368.54
Petty Cash Transactions:
Date	Purpose	Amount
	Opening balance		0.00
TOTAL PETTY CASH TRANSACTIONS:				0.00
ENDING PETTY CASH				0.00

* Specify the Type of holding (e.g. CD, Savings Account, Investment Security), and the depository name, location & account #

** Attach Exhibit Itemizing all petty cash transactions

II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS

AND OTHER PARTIES TO EXECUTORY CONTRACTS

Creditor, Lessor, Etc.	Frequency of Payments (Mo/Qtr)		Amount of Payment		Post-Petition payments not made (Number)		Total Due
Regus Mgt, lessor*		monthly	$	0.00		0		0.00
Premier Business Centers**		monthly	$	0.00		0		0.00
Riordon, Lewis & Haden ***		monthly	$	1,500.00		0		0.00
						TOTAL DUE:		0.00

* FirstFed Financial Corp. vacated offices managed by Regus Mgt. on 06/22/10.

** FirstFed Financial Corp vacated offices managed by Premier Business Centers prior to 09/30/10.

*** FirstFed Financial Corp entered into a new lease agreement effective 10/01/10.

The offices are managed by Riordan, Lewis & Haden.

III. TAX LIABILITIES

FOR THE REPORTING PERIOD:

		Gross Sales Subject to Sales Tax:				0.00
		Total Wages Paid:				10,000.00
	Total Post-Petition Amounts Owing		Amount Delinquent		Date Delinquent Amount Due
Federal Withholding*
State Withholding*
FICA—Employer’s Share*
FICA—Employee’s Share*
Federal Unemployment*
Sales and Use
Real Property
Other-Delaware Franchise**		3,125.00		0.00
TOTAL:		3,125.00		0.00

* Amounts paid through the payroll account. See “Total Disbursements from Payroll Account Current Period”

** The State of Delaware is requesting additional information from the Debtor as the Debtor changed its methodology from the authorized share method to the capital method (using gross assets). See also “Aging of Accounts Receivable”

IV. AGING OF ACCOUNTS PAYABLE AND RECEIVABLE

	*Accounts  Payable Post-Petition		Accounts Receivable
			Pre-Petition		Post- Petition
30 days or less		3,023.60		0.00		0.00
31—60 days		0.00		0.00		0.00
61—90 days		0.00		0.00		0.00
91—120 days		0.00		0.00		0.00
Over 120 days		0.00		124,600.00		0.00
TOTAL:		3,023.60		124,600.00		0.00

Delaware receivable of $124,600 proposed by Debtor is still pending.

V. INSURANCE COVERAGE

Type	Name of Carrier	Amount of Coverage		Policy Expiration Date		Premium Paid Through (Date)
General Liability	Hartford		1,000,000.00		1/11/2012		1/11/2012
Worker’s Compensation	Hartford		1,000,000.00		1/11/2012		Paid with Payroll
Casualty	None
Vehicle	None

The Debtor also maintains directors and officers liability coverage purchased pre-petition for the 2009/2010 coverage year and an extended reporting period for the policies covering the 2008/2009 coverage year also purchased pre-petition.

VI. UNITED STATES TRUSTEE QUARTERLY FEES

(TOTAL PAYMENTS)

Quarterly Period Ending (Date)	Total Disbursements		Quarterly Fees		Date Paid		Amount Paid		Quarterly Fees Still Owing
31-Mar-2010		134,229.09		975.00		18-Apr-2010		975.00		0.00
30-Jun-2010		157,114.39		1,625.00		20-Jul-2010		1,625.00		0.00
30-Sep-2010		89,586.25		975.00		12-Oct-2010		975.00		0.00
31-Dec-2010		333,124.03		4,875.00		10-Jan-2011		4,875.00		0.00
31-Mar-2011		378,812.38		4,875.00		27-Apr-2011		4,875.00		0.00
30-Jun-2011		173,135.33		1,625.00						1,625.00
										0.00
										0.00
										0.00
				14,950.00				13,325.00		1,625.00

* Post-Petition Accounts Payable SHOULD NOT include professionals’ fees and expenses which have been incurred but not yet awarded by the court. Post-Petition Accounts Payable SHOULD include professionals’ fees and expenses authorized by Court Order but which remain unpaid as of the close of the period report

VII SCHEDULE OF COMPENSATION PAID TO INSIDERS

Name of Insider	Date of Order Authorizing Compensation	*Authorized Gross Compensation		Gross Compensation Paid During the Month***
Babette Heimbuch	**	$	20,000/ month		0.00
Vikas Arora	**	$	17,500/ month		0.00
Brenda Battey	***	$	20,000/month		0.00
Brian Argrett	****	$	10,000/month		10,000.00

* Please indicate how compensation was identified in the order (e.g. $1,000/week, $2,500/month)

** Notice of Insider Compensation for Babette Heimbuch and Vikas Arora was filed and served on the UST and other necessary parties on January 7, 2010; no objections were filed.

*** Ms. Heimbuch and Mr. Arora no longer work for the Debtor. Ms. Battey works periodically for the Debtor at a rate of $150.00 per hour.

**** Notice of Insider Compensation for Brian Argrett was filed and served on the UST and other necessary parties on June 10, 2010; no objections were filed. Mr, Argrett was engaged by the Debtor upon the resignation of Ms. Heimbuch to provide Debtor with a second officer and to serve as its then Chief Executive Officer. Mr. Argrett currently serves as Corporate Secretary.

VIII. SCHEDULE OF OTHER AMOUNTS PAID TO INSIDERS

Name of Insider	Date of Order Authorizing Compensation	Description	Amount Paid During the Month
NONE

IX. PROFIT AND LOSS STATEMENT

(ACCRUAL BASIS ONLY)

	Current Month			Cumulative Post-Petition
Sales/Revenue:
Gross Sales/Revenue		—			—
Less: Returns/Discounts		—			—
Net Sales/Revenue		—			—
Cost of Goods Sold:
Beginning Inventory at cost
Purchases
Less: Ending Inventory at cost
Cost of Goods Sold (COGS)		—			—
Gross Profit		—			—
Other Operating Income (Itemize)
Operating Expenses:
Payroll—Insiders		10,000.00			356,153.85
Payroll—Other Employees		—			—
Payroll Taxes		765.00			28,749.56
Other Taxes (Itemize)		—			—
Legal & Professional-Special Counsel *		10,630.44			314,290.37
Legal & Professional-Bankruptcy Counsel **		18,896.80			517,981.10
Legal & Professional-Administration ***		16,000.00			200,000.00
Legal & Professional-Accounting & Auditing ****		255.00			203,895.87
Legal & Professional-Other *****		—			50,000.00
Depreciation and Amortization		24.00			432.00
Rent Expense—Real Property		1,500.00			26,757.79
Lease Expense—Personal Property		—			—
Insurance		406.00			2,581.00
Real Property Taxes		—			—
Telephone and Utilities		—			1,194.20
IT Expenses		—			371.00
Travel and Entertainment (Itemize)					—
Parking & Mileage		—			1,320.75
Miscellaneous Operating Expenses (Itemize)					—
Stock registrar fees		392.82			9,204.24
Delaware & Calif filing fees & franchise tax		—			4,960.27
Indentured Trustee Expenses		—			600.00
SEC 8K fees		889.00			16,419.00
Relocation Expenses		—			1,605.88
CSC fee for Delaware representation		—			356.00
US Trustee fees accrued		650.00			14,950.00
Office Supplies		—			347.86
Postage & Courier		—			203.28
Document Management		—			12,869.20
Payroll Processing Fees		55.67			1,433.86
Total Operating Expenses		60,464.73			1,766,677.08
Net Gain/(Loss) from Operations		(60,464.73	)		(1,766,677.08	)

IX. PROFIT AND LOSS STATEMENT

(ACCRUAL BASIS ONLY)

	Current Month			Cumulative Post-Petition
Non-Operating Income:
Interest Income
Net Gain on Sale of Assets (Itemize)
Other (Itemize)
Total Non-Operating income		—			—
Non-Operating Expenses:
Interest Expense
Legal and Professional (Itemize)
Other (Itemize)
Total Non-Operating Expenses		—			—
NET INCOME/(LOSS)		(60,464.73	)		(1,766,677.08	)

(Attach exhibit listing all itemizations required above)

Footnotes:

* Special counsel Manatt, Phelps & Phillips, LLP were paid pre-petition an initial retainer of $300,000. No Pre-petition fees and costs credited were used against the retainer. A $300,000 adjustment to Prepaid Legal Expense was made through Owners’ Equity. Costs and expenses incurred between the filing date and Mar-2011 were $304,574.92 exhausting the retainer. Pending court approval, $90,174.38 in fees for May and June 2011 have been incurred but not accrued. Additionally, $3,568.58 unpaid fees for March through April 2011 representing the 20% withheld amount per the Knudsen Order remain unpaid. See Footnote ** on Schedule X -Balance Sheet.

** Bankruptcy counsel Landau, Gottfried & Berger, LLP were paid pre-petition an initial retainer of $250,000. Pre-petition fees and costs credited against the retainer were $50,810.31 leaving a remaining retainer of $199,189.69 as of the filing date. A $199,189.69 adjustment to Prepaid Legal Expense was made through Owners’ Equity. Costs and fees from the filing date until August 2010 were $210,461.44 exhausting the remaining retainer. Pending court approval, $43,168.16 in fees for May and June 2011 have been incurred but not accrued. Additionally, $77,038.47 in unpaid fees for August 2010 through April 2011 representing the 20% withheld amount per the Knudsen Order remain unpaid. See footnote ** on Schedule X -Balance Sheet.

*** June and July Professional fees totaling $40,000 for Delta Corps, Inc., hiring Donald Pelgrim as Chief Administrative Officer, were paid after approval for payment by the Bankruptcy court. September 2010 through June 2011 professional fees of $200,000 for Carl McKinzie as Chief Executive Officer were incurred. $160,000 was paid after approval for payment by the Bankruptcy Court.

**** Accounting & Auditing Professional fees in the amount of $13,356 for Hutchinson & Bloodgood, LLP were incurred and unpaid pending approval of the fee statement from Bankruptcy court. Hutchinson & Bloodgood is no longer providing services to the Debtor.

**** The Debtor engaged Crowe Horwath, LLP for assistance with various tax matters including a 2008 federal tax audit and the filing of the 2009 tax returns. May through October 2010 costs and professional fees of $194,416.62 for Crowe Horwath’s engagement were paid after court approval, Pending court approval $309,727.86 in costs and fees for November 2010 through June 2011 have been incurred but not accrued. Additionally, $48,450.90 in unpaid fees for May through October 2010 representing the 20% withheld amount per the Knudsen Order remain unpaid. See footnote ** on Schedule X -Balance Sheet.

X. BALANCE SHEET

(ACCRUAL BASIS ONLY)

	Current Month End
ASSETS
Current Assets:
Unrestricted Cash		3,305,368.54
Restricted Cash
Accounts Receivable (Itemized, see below)*		124,600.00
Inventory
Notes Receivable
Prepaid Expenses (Rent)		1,500.00
Prepaid Expense-Legal Special Counsel		—
Prepaid Expense-Legal Bankruptcy Counsel		—
Prepaid Expense-Other Legal Counsel		—
Other (Prepaid Payroll)		10,820.67
Total Current Assets				3,442,289.21
Property, Plant, and Equipment		875.00
Accumulated Depreciation/Depletion		432.00
Net Property, Plant, and Equipment				443.00
Other Assets (Net of Amortization):
Due from Insiders
Other (Rent Deposits)		2,912.00
Total Other Assets				2,912.00
TOTAL ASSETS				3,445,644.21
LIABILITIES
Post-petition Liabilities:
Accounts Payable (Itemized, see below)**		1,880.00
Taxes Payable- Delaware Franchise Tax 2010		3,125.00
Notes Payable
Professional fees
Secured Debt
Other (Itemize)
Total Post-petition Liabilities				5,005.00
Pre-petition Liabilities:
Secured Liabilities
Priority Liabilities
Unsecured Liabilities***		159,617,187.50
Other (Itemized, see below)****		1,521.21
Total Pre-petition Liabilities				159,618,708.71
TOTAL LIABILITIES				159,623,713.71
EQUITY:
1 Pre-petition Owners’ Equity (original amount)		(155,177,680.00	)
2 Direct Charges to Equity (Itemized, see below)*****		766,287.58
3 Post-petition Profit/(Loss)		(1,766,677.08	)
TOTAL EQUITY				(156,178,069.50	)
TOTAL LIABILITIES & EQUITY				3,445,644.21

			(0.00	)
* Itemization of Accounts Receivable:
Delaware Franchise Tax Refund Due (prior years)	124,600.00
Total	124,600.00
**Itemization of Post-Petition Liabilities:
Christopher Damore (Accounting Svcs-MOR Prep)	255.00
U.S. Quarterly Trustee Fees	1,625.00
subtotal	1,880.00
**Not included in the above table are the following incured and unpaid amount that are pending Bankruptcy Court approval:
Carl McKinzie (Chief Executive Officer)	40,000.00
Hutchinson & Bloodgood, LLP (accounting & auditing)	13,356.00
Crowe Horwath, LLP (accounting & audit)	358,178.76
Landau, Gottfried, & Berger, LLP	120,206.36
Manatt, Phelps & Philips, LLP	93,742.96
subtotal	625,484.08
***Itemization of Pre-Petition Unsecured Liabilities
Senior Debt Due 2015	53,429,687.56
Senior Debt Due 2016	53,244,791.61
Senior Debt Due 2017	52,942,708.33
Total	159,617,187.50
****Itemization of Pre-Petition Other Liabilities
Nixon Peabody	318.74
Registrar & Transfer	983.52
DF King & Co	218.95
Total	1,521.21
*****Itemization of Direct Charges to Equity
Reduction in Delaware tax	157,600.00
Refund from Auditors	110,883.44
Legal Retainer—Manatt, Phelps & Phillips, LLP	300,000.00
Legal Retainer—Landau, Gottfried & Berger , LLP	199,189.69
Change in SEC Refund	135.53
Bills received and accrued after BK filing (see above)	(1,521.21	)
Change in Opening Cash Balance	0.04
Change in New Oak receivable	0.09
Total	766,287.58

The prepaid retainer of $250,000 for Bankruptcy Counsel-Landau, Gottfried & Berger was adjusted downward $50,810.31 as the activity occurred pre-petition. As of the petition date, the prepaid legal retainer for Bankruptcy Counsel was $199,189.69.

XI. QUESTIONNAIRE

		No		Yes
1.	Has the debtor-in-possession made any payments on its pre-petition unsecured debt, except as have been authorized by the court? If “Yes”, explain below:		x
			No		Yes
2.	Has the debtor-in-possession during this reporting period provided compensation or remuneration to any officers, directors, principals, or other insiders without appropriate authorization? If “Yes”, explain below:		x
3.	State what progress was made during the reporting period toward filing a plan of reorganization:
	The Debtor has negotiated the terms of a liquidating chapter 11 plan with its principal creditor, Wilmington Trust Company as Trustee for the bulk of its debt. That plan was filed with the Court on October 1, 2010. On November 12, 2010, the Debtor filed its disclosure statement and a motion seeking an order of the Court approving the same and setting plan solicitation and confirmation procedures.
4.	Describe potential future developments which may have a significant impact on the case:
	There is a potential refund of over $90 million relating to loss carrybacks from earlier tax years. The FDIC, in its capacity as Receiver for the Debtor’s bank subsidiary, has submitted a proof of claim which, among other things, claims that the FDIC is entitled to some or all of any such tax refund and may have other super priority claims. If the FDIC’s claim is successful, it will reduce or potentially eliminate any assets available for distribution to general unsecured creditors. The Debtor reserves its rights with respect to any such claims by the FDIC.
	Debtor continues to investigate potential claims against third parties to determine potential for recovery. No Committee of Unsecured Creditors has been appointed in the case. However, the Debtor continues to work and communicate cooperatively with Wilmington Trust, its principal unsecured creditor, concerning all aspects of the case.
5.	Attach copies of all Orders granting relief from the automatic stay that were entered duing the reporting period.
	None
			No		Yes
6.	Did you receive any exempt income this month, which is not set forth in the operating report? If “Yes”, please set forth the amounts and sources of the income below.		x
	I, Carl W. McKinzie, Chief Executive Officer, declare under penalty of perjury that I have fully read and understood the foregoing debtor-in-possession operating report and that the information contained herein is true and complete to the best of my knowledge.

/s/ Carl W. McKinzie	Dated: 07/15/2011
Carl W. McKinzie
Chief Executive Officer