Exhibit 99.1
CASE NAME: Acceptance Insurance Companies Inc.
CASE NO: 05-80059
Form OPR-1A
11/30/06 | 12/31/06 | 1/31/07 | 2/28/07 | 3/31/07 | 4/30/07 | |||||||||||||
CURRENT ASSETS: | ||||||||||||||||||
Cash (Attach Recons. & Bk Stmts.) | (585 | ) | 816 | 824 | 1,170 | 1,702 | 1,005 | |||||||||||
Investment securities, at market | 1,921,375 | 1,807,249 | 1,756,026 | 1,743,283 | 1,725,902 | 1,617,563 | ||||||||||||
Prepaid expense & deposits | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | ||||||||||||
TOTAL CURRENT ASSETS | 1,980,790 | 1,868,065 | 1,816,850 | 1,804,453 | 1,787,604 | 1,678,568 | ||||||||||||
OTHER ASSETS: | ||||||||||||||||||
Note receivable from AIC | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||||
Valuation allowance | (20,000,000 | ) | (20,000,000 | ) | (20,000,000 | ) | (20,000,000 | ) | (20,000,000 | ) | (20,000,000 | ) | ||||||
Investment in AIC, at underlying book value (see attachment A) | 11,691,065 | 11,691,065 | 11,736,045 | 11,736,045 | 11,736,045 | 11,863,974 | ||||||||||||
Contingent claims | 21,500,000 | 21,500,000 | 21,500,000 | 21,500,000 | 21,500,000 | 21,500,000 | ||||||||||||
TOTAL OTHER ASSETS | 33,191,065 | 33,191,065 | 33,236,045 | 33,236,045 | 33,236,045 | 33,363,974 | ||||||||||||
TOTAL ASSETS | 35,171,855 | 35,059,130 | 35,052,895 | 35,040,498 | 35,023,649 | 35,042,542 | ||||||||||||
I CERTIFY UNDER PENALTY OF PERJURY THAT THIS 5 PAGE OPERATING REPORT IS TRUE AND CORRECT.
Date Submitted May 14, 2007 | Signed /s/ Gary N. Thompson | Printed Name of Signatory Gary N. Thompson |
CASE NAME: Acceptance Insurance Companies Inc.
CASE NO: 05-80059
Form OPR-1B
11/30/06 | 12/31/06 | 1/31/07 | 2/28/07 | 3/31/07 | 4/30/07 | |||||||||||||
LIABILITIES: | ||||||||||||||||||
Post-Petition debt (Sched. C) | 103,765 | 18,603 | 34,724 | 37,967 | 34,821 | 33,409 | ||||||||||||
Pre-Petition Debt: | ||||||||||||||||||
Litigation claims (see attachment A) | 22,000,000 | 22,000,000 | 22,000,000 | 22,000,000 | 22,000,000 | 22,000,000 | ||||||||||||
Unsecured liabilities | 46,054 | 46,054 | 46,054 | 46,054 | 46,054 | 46,054 | ||||||||||||
Unsecured debt | 116,110,260 | 116,110,260 | 116,110,260 | 116,110,260 | 116,110,260 | 116,110,260 | ||||||||||||
TOTAL LIABILITIES | 138,260,079 | 138,174,917 | 138,191,038 | 138,194,281 | 138,191,135 | 138,189,723 | ||||||||||||
SHAREHOLDERS EQUITY: | ||||||||||||||||||
Preferred stock | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Common stock | 6,274,000 | 6,274,000 | 6,274,000 | 6,274,000 | 6,274,000 | 6,274,000 | ||||||||||||
Paid-in capital | 199,660,000 | 199,660,000 | 199,660,000 | 199,660,000 | 199,660,000 | 199,660,000 | ||||||||||||
Treasury stock | (29,969,000 | ) | (29,969,000 | ) | (29,969,000 | ) | (29,969,000 | ) | (29,969,000 | ) | (29,969,000 | ) | ||||||
Retained earnings: | ||||||||||||||||||
As of filing date | (281,005,796 | ) | (281,005,796 | ) | (281,005,796 | ) | (281,005,796 | ) | (281,005,796 | ) | (281,005,796 | ) | ||||||
After filing date | 1,952,572 | 1,925,009 | 1,902,653 | 1,887,013 | 1,873,310 | 1,893,615 | ||||||||||||
TOTAL SHAREHOLDERS EQUITY | (103,088,224 | ) | (103,115,787 | ) | (103,138,143 | ) | (103,153,783 | ) | (103,167,486 | ) | (103,147,181 | ) | ||||||
TOTAL LIABILITIES AND SHAREHOLDER EQUITY | 35,171,855 | 35,059,130 | 35,052,895 | 35,040,498 | 35,023,649 | 35,042,542 | ||||||||||||
CASE NAME: Acceptance Insurance Companies Inc.
CASE NO: 05-80059
Form OPR-2
STATEMENT OF INCOME
11/30/06 | 12/31/06 | 1/31/07 | 2/28/07 | 3/31/07 | 4/30/07 | |||||||||||||
REVENUE: | ||||||||||||||||||
Net investment income | 8,211 | 7,667 | 8,408 | 6,966 | 7,354 | 7,290 | ||||||||||||
Net realized gain | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Other | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||
Salaries and benefits | (6,498 | ) | (6,498 | ) | (7,222 | ) | (7,222 | ) | (7,222 | ) | (7,221 | ) | ||||||
Board fees and expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Legal fees and expenses | (50,240 | ) | (26,690 | ) | (68,191 | ) | (11,142 | ) | (11,882 | ) | (104,708 | ) | ||||||
Accounting fees and expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Insurance | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Franchise taxes | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Filing fees and expenses | (1,994 | ) | (1,957 | ) | (327 | ) | (4,173 | ) | (1,947 | ) | (2,979 | ) | ||||||
Miscellaneous | (5 | ) | (86 | ) | (5 | ) | (69 | ) | (5 | ) | (5 | ) | ||||||
NET OPERATING INCOME / LOSS | (50,526 | ) | (27,564 | ) | (67,337 | ) | (15,640 | ) | (13,702 | ) | (107,623 | ) | ||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||
Interest expense | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Income tax refund | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Equity in operating earnings of AIC | 0 | 0 | (41,826 | ) | 0 | 0 | 1,250 | |||||||||||
Equity in unrealized losses of securities of AIC | 0 | 0 | 86,806 | 0 | 0 | 126,679 | ||||||||||||
TOTAL OTHER INCOME (EXPENSE) | 0 | 0 | 44,980 | 0 | 0 | 127,929 | ||||||||||||
NET INCOME (LOSS) | (50,526 | ) | (27,564 | ) | (22,357 | ) | (15,640 | ) | (13,702 | ) | 20,306 | |||||||
CASE NAME: Acceptance Insurance Companies Inc.
CASE NO: 05-80059
Form OPR-3
SOURCES AND USE OF CASH
11/30/06 | 12/31/06 | 1/31/07 | 2/28/07 | 3/31/07 | 4/30/07 | |||||||||||||
CASH DIFFERENCE: | ||||||||||||||||||
Current ending cash balance | (585 | ) | 816 | 824 | 1,170 | 1,702 | 1,005 | |||||||||||
Less ending prior month balance | (291 | ) | 585 | (816 | ) | (824 | ) | (1,170 | ) | (1,702 | ) | |||||||
NET CASH INCREASE (DECREASE) | (876 | ) | 1,401 | 8 | 346 | 532 | (697 | ) | ||||||||||
SOURCES OF CASH: | ||||||||||||||||||
Net income (loss) | (50,526 | ) | (27,564 | ) | (22,357 | ) | (15,640 | ) | (13,702 | ) | 20,306 | |||||||
Equity in earnings and unrealized losses of AIC | 0 | 0 | (44,980 | ) | 0 | 0 | (127,929 | ) | ||||||||||
Decrease in: | ||||||||||||||||||
Receivables | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Marketable securities | 11,430 | 114,127 | 51,224 | 12,744 | 17,381 | 108,340 | ||||||||||||
Increase in: | ||||||||||||||||||
Post- petition debt | 38,220 | 0 | 16,121 | 3,242 | 0 | 0 | ||||||||||||
Pre-petition debt | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
TOTAL SOURCES OF CASH | (876 | ) | 86,563 | 8 | 346 | 3,679 | 717 | |||||||||||
USES OF CASH: | ||||||||||||||||||
Increase in: | ||||||||||||||||||
Receivables | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Marketable securities | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Decrease in: | ||||||||||||||||||
Post- petition debt | 0 | (85,162 | ) | 0 | 0 | (3,147 | ) | (1,414 | ) | |||||||||
Pre-petition debt | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
TOTAL USES OF CASH | 0 | (85,162 | ) | 0 | 0 | (3,147 | ) | (1,414 | ) | |||||||||
NET CASH INCREASE (DECREASE) | (876 | ) | 1,401 | 8 | 346 | 532 | (697 | ) | ||||||||||
CASE NAME: Acceptance Insurance Companies Inc.
CASE NO: 05-80059
SCHEDULE C
SCHEDULE OF POST PETITION
11/30/06 | 12/31/06 | 1/31/07 | 2/28/07 | 3/31/07 | 4/30/07 | |||||||
TRADE ACCOUNTS PAYABLE | 103,765 | 18,603 | 34,724 | 37,967 | 34,821 | 33,409 | ||||||
PAYROLL AND PAYROLL TAXES | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
TAXES PAYABLE | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
TOTAL POST PETITION DEBT | 103,765 | 18,603 | 34,724 | 37,967 | 34,821 | 33,409 | ||||||
CASE NAME: Acceptance Insurance Companies Inc.
CASE NO: 05-80059
ATTACHMENT A
Granite Reinsurance Company, Ltd. (“Granite Re”), a Barbados reinsurer, filed a proof of claim against AICI, in its Chapter 11 proceeding claiming AICI owed it $10,875,363, comprised of $9,000,000 of premium, plus interest, pursuant to an MPCI Stop Loss Reinsurance Contract (“Contract”) issued by Granite Re. Their $9,000,000 claim is included in the liability for litigation claims shown above. Subsequently, Granite Re filed a complaint in the United States District Court for the District of Nebraska against AICI’s wholly owned subsidiary, Acceptance Insurance Company (“AIC”), alleging AIC also was liable to Granite Re on the same Contract. By consent, the district court transferred Granite Re’s proceeding against AIC to the United States Bankruptcy Court for the District of Nebraska (the “Bankruptcy Court”), which consolidated the proceeding with proceedings in AICI’s Chapter 11 proceeding as Adversary Proceeding No. A06-8015. AICI thereafter initiated a separate adversary proceeding against Granite Re asserting a claim for unjust enrichment. (Adv. Pro. No. A06-8115). AICI asserted the Contract lacked consideration, and that Granite Re had been unjustly enriched by the $6,000,000 AICI paid to Granite Re for reinsurance Granite Re did not in fact provide. All issues associated with Granite Re’s proof of claim asserted against AICI, Granite Re’s adversary complaint against AIC, and AICI’s adversary complaint against Granite Re were consolidated for discovery and trial. On May 9, 2007 the Bankruptcy Court ruled that: (i) Granite Re has no right to premiums claimed and AICI and AIC have no right to a refund of premiums paid; (ii) the adversary proceedings of Granite Re and AICI will be dismissed and (iii) the Granite Re claim filed in the bankruptcy case will be denied. This ruling is subject to stay or appeal.