8-K

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: May 26, 2006

THE KUSHNER-LOCKE COMPANY

(Exact name of registrant as specified in its charter)

California (State or other jurisdiction of incorporation)	0-17295 (Commission File Number)	95-4079057 (IRS Employer Identification No.)
280 South Beverly Drive, Suite 205, Beverly Hills, California		90212
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (310) 275-7505

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:

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

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

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

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

     As previously disclosed in its Current Report on Form 8-K filed on November 21, 2001, and the Registrant’s Form 12b-25 filed on January 2, 2002, The Kushner-Locke Company, a California corporation (the “Registrant”), and certain of its wholly-owned subsidiaries (collectively, the “Debtors”), filed on November 21, 2001, voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. The Debtors’ Chapter 11 cases are currently pending before the United States Bankruptcy Court for the Central District of California, Los Angeles Division (the “Bankruptcy Court”) and are being jointly administered under Case No. LA-01-44828-SB.

     The Registrant’s unaudited monthly operating report and monthly interim statement required by the Bankruptcy Court for March 2006 are provided in this Current Report on Form 8-K. The operating report and interim statement have been duly filed by the Registrant with the Bankruptcy Court.

     THE OPERATING REPORT AND THE INTERIM STATEMENT CONTAIN FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION THAT HAVE NOT BEEN AUDITED OR REVIEWED BY INDEPENDENT ACCOUNTANTS, ARE NOT PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AND MAY BE SUBJECT TO FUTURE RECONCILIATION OR ADJUSTMENTS. THE OPERATING REPORT AND INTERIM STATEMENT MAY ALSO CONTAIN INFORMATION FOR PERIODS THAT ARE SHORTER OR OTHERWISE DIFFERENT FROM THOSE CONTAINED IN THE REGISTRANT’S REPORTS REQUIRED TO BE MADE PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

     THE REGISTRANT MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER AS TO ANY OF THE INFORMATION CONTAINED IN THE OPERATING REPORT OR THE INTERIM STATEMENT. FOR THESE REASONS, THE REGISTRANT CAUTIONS READERS NOT TO PLACE UNDUE RELIANCE UPON THE INFORMATION CONTAINED IN THE OPERATING REPORT OR THE INTERIM STATEMENT. THE OPERATING REPORT AND INTERIM STATEMENT ARE BEING PROVIDED SOLELY FOR INFORMATION PURPOSES; THEY WERE NOT PREPARED FOR THE PURPOSE OF PROVIDING THE BASIS FOR AN INVESTMENT DECISION RELATING TO THE SECURITIES OF THE REGISTRANT.

Item 9.01. Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired.
	Not Applicable.
(b)	Pro Forma Financial Information.
	Not Applicable.
(c)	Exhibits.
	Exhibit 99.1.    Monthly Interim Statement of The Kushner-Locke Company (the “Registrant”) for the calendar month from March 1, 2006 to March 31, 2006.
	Exhibit 99.2.    Monthly Operating Report of the Registrant for the calendar month from March 1, 2006 to March 31, 2006.

SIGNATURES

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

Dated: May 26, 2006	THE KUSHNER-LOCKE COMPANY
	By:	/s/ Alice P. Neuhauser
		Alice P. Neuhauser
		Responsible Officer

EX-99.1

EXHIBIT 99.1

Office of the United States Trustee

In re:

   The Kushner-Locke Company

Chapter 11

Case No. LA 01-44828-SB (Administratively Consolidated with
Case Nos. LA 01-44829-SB through LA 01-44831-SB; LA 01-
44833-SB through LA 01-44836-SB; and LA 01-44841-SB)

DEBTOR IN POSSESSION INTERIM STATEMENT

Page 1 of 3

Statement Number:	53
For the Period FROM:	3/1/2006
TO:	3/31/2006

			Collateral		Concentration			City National
CASH ACTIVITY ANALYSIS (Cash Basis Only)			Account		Account			Collection Account
Balance before Statement #1			$	268,333.21	$	65,956.21
A. Total Receipts per all Prior Interim Statements			$	8,835,669.72	$	6,996,979.89		$	482,632.52
B. Less: Total Disbursements per all Prior Statements			$	7,194,903.55	$	6,990,892.77		$	5,992.48
C. Beginning Balance			$	1,909,099.38	$	72,043.33		$	476,640.04
D. Receipts during Current Period
Description
	3/2/2006	Wire Transfer			$	45,000.00
	3/3/2006	Sting Music						$	12,478.00
	3/6/2006	Court TV			$	15,000.00
	3/10/2006	Zolfo Cooper	$	4,318.30
	3/10/2006	Court TV (Kushner-Locke)	$	3,750.00	$	(3,750.00	)
	3/15/2006	Wire Transfer			$	35,000.00
	3/30/2006	Wire Transfer			$	40,000.00
	3/31/2006	interest	$	7,128.47
		TOTAL RECEIPTS THIS PERIOD	$	15,196.77	$	131,250.00		$	12,478.00		—
E. Balance Available (C plus D)			$	1,924,296.15	$	203,293.33		$	489,118.04	$	—

DEBTOR IN POSSESSION INTERIM STATEMENT NO: 53 Page 2 of 3

F. Less: Disbursements during Current Period:

Date		Check No.		Payee/Purpose
	3/2/2006			Wire Transfer	$	45,000.00
	3/2/2006		38449	Alice P.Neuhauser			$	381.81
	3/2/2006		38450	Bowne of Los Angeles, Inc			$	566.00
	3/2/2006		38451	USI of Southern California			$	5,000.00
	3/2/2006		38452	SBC			$	82.62
	3/2/2006		38453	SBC			$	362.98
	3/2/2006		38455	Clumeck,Stern,Schenkelburg& Getzo			$	6,365.75
	3/3/2006			ADP Fees			$	167.00
	3/6/2006		38456	Qwest Communications			$	50.30
	3/6/2006		38457	Bonded Services, Inc			$	6,582.81
	3/6/2006		38458	Bowne of Los Angeles, Inc			$	466.40
	3/6/2006		38459	Vision Films			$	11,250.00
	3/6/2006		38461	KEREN AMINIA			$	190.00
	3/10/2006			ADP Fees			$	106.17
	3/14/2006		8277	Payroll			$	1,319.77
	3/14/2006		8278	Payroll			$	10,049.84
	3/14/2006		8279	Payroll			$	1,544.04
	3/14/2006		8280	Payroll			$	2,744.04
	3/14/2006			ADP Taxes			$	11,269.81
	3/15/2006			Service Charge			$	139.02
	3/15/2006			Wire Transfer	$	35,000.00
	3/17/2006			ADP Fees			$	20.00
	3/17/2006		38462	Accurate Express			$	18.00
	3/17/2006		38463	Recall			$	1,239.73
	3/17/2006		38464	New Wave Entertainment			$	150.40
	3/17/2006		38465	Blue Shield of California			$	373.00
	3/22/2006		38466	KEREN AMINIA			$	360.83
	3/22/2006		38467	KEVIN MARINO			$	261.01
	3/22/2006		38468	Health Net			$	4,187.18
	3/22/2006		38469	Arrowhead			$	24.79
	3/24/2006			ADP Fees			$	273.17
	3/28/2006			ADP Taxes			$	10,778.97
	3/28/2006		8281	Payroll			$	1,319.76
	3/28/2006		8282	Payroll			$	10,291.37
	3/28/2006		8283	Payroll			$	1,544.03
	3/28/2006		8284	Payroll			$	2,744.04
	3/30/2006		38470	SBC			$	82.49
	3/30/2006		38471	SBC			$	340.24
	3/30/2006		38472	KEVIN MARINO			$	210.94
	3/30/2006		38473	New Beginnings Enterprises			$	4,052.10
	3/30/2006			Wire Transfer	$	40,000.00
	3/31/2006			Control Agreement					$	50.00
TOTAL DISBURSEMENTS THIS PERIOD:					$	120,000.00	$	96,910.41	$	50.00		—
G. Ending Balance (E less F)					$	1,804,296.15	$	106,382.92	$	489,068.04	$	—

DEBTOR IN POSSESSION INTERIM STATEMENT NO: 53 Page 3 of 3

H. (1) Collateral Account:
a) Depository Name and Location:	Chase Bank 1 Chase Manhattan Plaza, New York, NY 10081
b) Account Number:	323221556
(2) Concentration Account:
a) Depository Name and Location:	Comerica Bank 10900 Wilshire Blvd, Los Angeles, CA 90024
b) Account Number:	1891935460

I: Other monies on hand:

The Kushner Locke Company PWI account		$	731.10
Bank of Scotland — Pinocchio	936582	£	449,354.22	Pound Sterling	Time Deposit
Bank of Scotland — Basil	936582	£	222,619.06	Pound Sterling	Time Deposit (KL' s interest is 50%)
Allied Pinocchio	10747301	$	—	Pound Sterling
Edge Entertainment	1891152710	$	172.89
I: Other monies on hand (continued):
Additionally, the Company maintains a minimal amount of Petty Cash (less than $500).
Joint Venture Accounts:
BLT Venture	178-71491-7	$	16,890.04
BLT Venture	16-524173-1101	$	330.45
KL MDP Sensation	60-066-930	$	—
KL\7 Venture	1890-69-6360	$	29,999.80
Denial Venture	1890-69-6501	$	76,710.74
Cracker LLC	1891-04-1665	$	732.79
Swing	323-518095	$	8,097.50

I, Alice Neuhauser, declare under penalty of perjury that the information contained in the above Debtor in Possession Interim Statement is true and correct to the best of my knowledge.

/s/ Alice Neuhauser  

Debtor in Possession 

EX-99.2

EXHIBIT 99.2

Office of the United States Trustee

In re:

   The Kushner-Locke Company

Chapter 11

Case No. LA 01-44828-SB (Administratively Consolidated with
Case Nos. LA 01-44829-SB through LA 01-44831-SB; LA 01-
44833-SB through LA 01-44836-SB; and LA 01-44841-SB)

DEBTOR IN POSSESSION OPERATING REPORT

Page 1 of 2

Statement Number:	53
For the Period FROM:	3/1/2006
TO:	3/31/2006

1 Profit and Loss Statement (Accrual Basis Only)
A. Related to Business Operations
Gross Sales		$	—
Costs Related to Revenues (Film Cost Amortization)
Gross Profit					—
Less: Operating Expenses
Officer Compensation	35,719
Salaries and Wages — Other Employees	14,215
Total Salaries and Wages			49,934
Employee Benefits and Pensions			4,560
Employer Payroll Taxes/Fees	4,238
Other Taxes
Total Taxes			4,238
Rent and Lease Expense (including parking)	4,052
Distribution/Delivery Expenses	11,418
Interest Expense
Insurance	5,000
Automobile Expense/Mileage
Utilities (incl. Phone, phone equipment, internet)	919
Depreciation and Amortization
Business Equipment Leases
Business Expense reimbursement	1,405
Storage Expense	7,823
Supplies, Office Expenses, Photocopies, etc.	25
Bad Debts
Miscellaneous Operating Expenses	1,221
Total Operating Expenses			90,595
Net Gain/Loss from Business Operations					(90,595	)
B. Not related to Business Operations
Income
Interest Income
Other Non-Operating Revenues			—
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 Service Fees			6,366
Other Non-Operating Expenses (Board/Trustee fees)			—
Total Non-Operating Expenses					6,366
NET INCOME/(LOSS) FOR PERIOD				$	(96,960	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 53 Page 2 of 2

2 Aging of Accounts Payable and Accounts Receivable (exclude prepetition accounts payable):

	Accounts		Accounts
	Payable		Receivable
Current      Under 30 days				—
Overdue      31-60 days		—		—
Overdue      61-90 days		—
Overdue      91-120 days		—
Overdue Over      121 days		—
Due in the Future		2,763		1,514,834
TOTAL		2,763		1,514,834

3 Statement of Status of Payments to Secured Creditors and Lessors:

     No payments to Secured Creditors or Lessors were paid or payable during the reporting period.

4 Tax Liability

     No tax payments were paid or payable during the reporting period other than payroll taxes shown above.

5 Insurance Coverage	Carrier/	Amount of		Policy		Premium Paid
	Agent Name	Coverage		Expiration Date		Through Date
Worker’s Compensation (RENEWED)	St. Paul		1,000,000		1/14/2007		1/14/2007
Commercial Property (RENEWED)	St. Paul		2,000,000		2/14/2007		2/14/2007
Errors & Omissions — Library (RENEWED)	St. Paul		3,000,000		3/3/2007		3/3/2007

6 Questions:

A.	Has the Debtor in Possession provided compensation to any officers, directors, shareholders, or other principals without the approval of the Office of the United States Trustee?
	o Yes          Explain:
	x No
B.	Has the Debtor in Possession, subsequent to the filing of the petition, made any payments on its prepetition unsecured debt, except as authorized by the Court?
	o Yes          Explain:
	x No

7 Statement on Unpaid Professional Fees (Postpetition Amounts Only)

Total unpaid post-petition Professional Fees during the reporting period: $ 230,897.12

8 Narrative Report of Significant Events and Events out of the Ordinary Course of Business:

     None.

9 Quarterly Fees:

     Paid

I, Alice Neuhauser, declare under penalty of perjury that the information contained in the above Debtor in Possession Interim Statement is true and correct to the best of my knowledge.

/s/ Alice Neuhauser  

Debtor in Possession