UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
| In re: | ) | Case No. 02 B 12059 (Jointly Administered) | ||
| ) | ||||
| HA 2003, INC., formerly known as | ) | Chapter 11 | ||
| HA-LO INDUSTRIES, INC.,et al., | ) | |||
| ) | Hon. Carol A. Doyle | |||
| Debtors and | ) | |||
| Debtors-in-Possession, |
DEBTORS' POST-SALE MONTHLY OPERATING REPORT
FOR THE PERIOD FROM MAY 14, 2003 THROUGH MAY 31, 2003
Neal L. Wolf (IL ARDC No. 6186361)
Todd L. Padnos (IL ARDC No. 6209679)
Brett J. Kitei (admittedpro hac vice)
LeBOEUF, LAMB, GREENE & MACRAE, LLP
One Embarcadero Center, 4th Floor
San Francisco, CA 94111
Telephone: (415) 951 1100
Facsimile: (415) 951 1180
Counsel for Debtors and Debtors-in-Possession
HA2003, Inc., formerly known as HA-LO Industries, Inc. ("HA-LO"), and its wholly-owned subsidiaries, LW2003, Inc., formerly known as Lee Wayne Corporation ("Lee Wayne"), and Starbelly.com, Inc. ("Starbelly"), debtors and debtors-in-possession in these Chapter 11 cases (collectively, the "Debtors"),(1) hereby submit this post-sale monthly operating report for the period from May 14, 2003 through May 31, 2003.
The customary reporting format provides for financial information of a debtor operating a business. On May 14, 2003, HA-LO and Lee Wayne sold substantially all of their assets to two affiliates of H.I.G. Capital, LLC. These assets included all operating assets of the Debtors. As a result, the Debtors are no longer operating a promotional products business. Given the foregoing, the format for this report has been modified.
| Dated: October 17, 2003 | Respectfully submitted, | |
/s/ Brett J. Kitei Neal L. Wolf (IL ARDC No. 6186361) Todd L. Padnos (IL ARDC No. 6209679) Brett J. Kitei (admittedpro hac vice) LeBoeuf, Lamb, Greene & MacRae, LLP One Embarcadero Center, 4th Floor San Francisco, CA 94111 Telephone: (415) 951 1100 Facsimile: (415) 951 1180 Counsel for Debtors and Debtors-in-Possession |
2
TABLE OF CONTENTS
Monthly Operating Report
HA-LO INDUSTRIES, INC. (Case No. 02 B 12059)
For the period of May 14, 2003 through May 31, 2003
| Tab A: | Consolidated Balance Sheet (May 14, 2003 through May 31, 2003) | |
Tab B: | Cash Receipts | |
Tab C: | Cash Disbursements | |
Tab D: | Accounts and Notes Receivable | |
Tab E: | Accounts Payable | |
Tab F: | Tax Questionnaires | |
Tab G: | Declaration under Penalty of Perjury |
HA2003, Inc.
Monthly Operating Report—May 2003
Case No. 02 B 12059 (Jointly Administered)
Balance Sheet as at May 31, 2003
| | HA2003, Inc. | LW2003, Inc. | Starbelly.com | Consolidated | |||||
|---|---|---|---|---|---|---|---|---|---|
| ASSETS | |||||||||
| Current Assets | |||||||||
| Unrestricted Cash and Cash Equivalents | 9,490,360 | 3,715 | — | 9,494,075 | |||||
| Accounts Receivable | 3,038,342 | (388 | ) | — | 3,037,954 | ||||
| Note Receivable | 6,677,463 | — | — | 6,677,463 | |||||
| Inventories | — | — | — | — | |||||
| Prepaid Expenses | 103,356 | — | — | 103,356 | |||||
| Professional Retainers | — | — | — | — | |||||
| Other Current Assets | — | — | — | — | |||||
| TOTAL CURRENT ASSETS | 19,309,520 | 3,327 | — | 19,312,847 | |||||
| Property and Equipment | — | ||||||||
| Real Property and Improvements | — | — | — | — | |||||
| Machinery and Equipment | — | — | — | — | |||||
| Furniture, Fixtures and Office Equipment | — | — | — | — | |||||
| Leasehold Improvements | — | — | — | — | |||||
| Vehicles | — | — | — | — | |||||
| Less Accumulated Depreciation | — | — | — | — | |||||
| TOTAL PROPERTY & EQUIPMENT | — | — | — | — | |||||
| Other Assets | — | ||||||||
| Loans to Insiders | — | — | — | — | |||||
| Other Assets | — | — | — | — | |||||
| TOTAL OTHER ASSETS | — | — | — | — | |||||
| TOTAL ASSETS | 19,309,520 | 3,327 | — | 19,312,847 | |||||
LIABILITIES AND OWNER EQUITY | |||||||||
| Liabilities Not Subject to Compromise (Postpetition) | |||||||||
| Accounts Payable | — | — | — | — | |||||
| Taxes Payable | 172,403 | — | — | 172,403 | |||||
| Wages Payable | 27,000 | — | — | 27,000 | |||||
| Notes Payable | — | — | — | — | |||||
| Reant/Leases—Building/Equipment | — | — | — | — | |||||
| Professional Fees | 845,605 | — | — | 845,605 | |||||
| Amounts due Insiders | — | — | — | — | |||||
| Other Postpetition Liabilities | — | 41,666 | — | 41,666 | |||||
| TOTAL POSTPETITION LIABILITIES | 1,045,008 | 41,666 | — | 1,086,673 | |||||
| Liabilities Subject to Compromise (Pre-petition) | — | ||||||||
| Secured Debt | — | — | — | — | |||||
| Priority Debt | — | — | — | — | |||||
| Unsecured Debt | 34,882,176 | 8,054,233 | 5,105,738 | 48,042,147 | |||||
| TOTAL PRE-PETITION LIABILITIES | 34,882,176 | 8,054,233 | 5,105,738 | 48,042,147 | |||||
| TOTAL LIABILITIES | 35,927,184 | 8,095,898 | 5,105,738 | 49,128,820 | |||||
| Owners Equity | — | ||||||||
| Capital Stock | 461,385,054 | 1,000 | — | 461,386,054 | |||||
| Additional Paid in Capital | — | — | — | ||||||
| Partners' Capital Account | — | — | — | ||||||
| Owners Equity Account | — | — | — | ||||||
| Retained Earning—Pre-petition | (80,420,662 | ) | 6,991,016 | (305,135,251 | ) | (378,564,897 | ) | ||
| Retained Earning—Postpetition | (385,029,270 | ) | (15,084,588 | ) | 300,029,513 | (100,084,345 | ) | ||
| Adjustments to Owners Equity | (12,552,785 | ) | — | — | (12,552,785 | ) | |||
| Postpetition Contributions | — | — | — | ||||||
| NET OWNERS EQUITY | (16,617,663 | ) | (8,092,572 | ) | (5,105,738 | ) | (29,815,973 | ) | |
| TOTAL LIABILITIES AND OWNER EQUITY | 19,309,520 | 3,327 | 0 | 19,312,847 | |||||
HA2003, Inc.
Case No. 02 B 12059 (Jointly Administered)
Monthly Operating Report—May 2003
Cash Receipts
| Clear Date | Description | Receipts | ||
|---|---|---|---|---|
| 05/14/03 | Wires from HIG for sale | 12,884,759 | ||
| 05/15/03 | Interest | 333 | ||
| 05/31/03 | Interest | 2,888 | ||
| Total | 12,887,980 | |||
HA2003, Inc.
Case No. 02 B 12059 (Jointly Administered)
Monthly Operating Report—May 2003
Cash Disbursements
| Clear Date | Check Date | Check # | Description | Disbursements | Note | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| 05/14/03 | Repayment of LaSalle DIP Line | (748,101 | ) | |||||||
| 05/20/03 | 05/20/03 | wire | FTI Consulting | (75,803 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Neil Gerber & Associates | (300,000 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Piper Rudnick | (167,902 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Price Waterhouse | (44,051 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Saul Ewing | (48,200 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Silverman Consulting | (100,000 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Sperling & Slater | (238,946 | ) | professional fees | ||||
| 05/20/03 | 05/20/03 | wire | Orrick | (300,000 | ) | professional fees | ||||
| 05/23/03 | 05/23/03 | wire | Simon Escrow | (1,202,500 | ) | severance | ||||
| Total | (3,225,503 | ) | ||||||||
HA2003, Inc.
Case No. 02 B 12059 (Jointly Administered)
Monthly Operating Report—May 2003
Accounts and Notes Receivable
| Premier—intercompany | 2,896,106 | |
| HIG—assumed float | 141,848 | |
| Beanstalk—note receivable | 1,087,500 | |
| Ha-Lo Holdings, BV (HIG)—note receivable | 4,589,963 | |
| Upshot Escrow | 1,000,000 | |
| Total | 9,715,416 | |
HA2003, Inc.
Monthly Operating Report—May 2003
Case No. 02 B 12059 (Jointly Administered)
Accounts Payable
| Mayer Brown Rowe | 3,402 | |
| Petersen & Lefkofsky | 575 | |
| Fasken Martineau Dumoulin | 4,355 | |
| Logan & Co | 16,649 | |
| Wildman Harrold Allen & Dixon | 25,863 | |
| Sachnoff & Weaver | 34,603 | |
| Ungaretti & Harris | 4,064 | |
| Ernst & Young | 6,056 | |
| FTI Consulting | 27,161 | |
| Lincoln Partners | 49,514 | |
| Piper Rudnick | 39,747 | |
| Saul Ewing | 1,996 | |
| Silverman Consulting | 38,817 | |
| Sperling & Slater | 91,406 | |
| Neal Gerber & Eisenberg | 501,396 | |
| Total | 845,605 | |
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CASE NAME: HA2003, INC. CASE NO.: 02 B 12059
FOR MAY 14 THRU MAY 31, 2003
TAX QUESTIONNAIRE
Debtors in possession and trustees are required to pay all taxes incurred after the filing of their Chapter 11 petition on an as due basis. Please indicate whether the following post petition taxes or withholdings have been paid currently.
| 1. | Federal Income Taxes | Yesý | Noo | |||||
2. | FICA withholdings | Yesý | Noo | |||||
3. | Employee's withholdings | Yesý | Noo | |||||
4. | Employer's FICA | Yesý | Noo | |||||
5. | Federal Unemployment Taxes | Yesý | Noo | |||||
6. | State Income Tax | Yesý | Noo | |||||
7. | State Employee withholdings | Yesý | Noo | |||||
8. | All other state taxes | Yeso | Noý |
If any of the above have not been paid, state below the tax not paid, the amounts past due and the date of last payment.
Item 8
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CASE NAME: LW2003, INC. CASE NO.: 02 B 13224
FOR MAY 14 THRU MAY 31, 2003
TAX QUESTIONNAIRE
Debtors in possession and trustees are required to pay all taxes incurred after the filing of their Chapter 11 petition on an as due basis. Please indicate whether the following post petition taxes or withholdings have been paid currently.
| 1. | Federal Income Taxes | Yesý | Noo | |||||
2. | FICA withholdings | Yesý | Noo | |||||
3. | Employee's withholdings | Yesý | Noo | |||||
4. | Employer's FICA | Yesý | Noo | |||||
5. | Federal Unemployment Taxes | Yesý | Noo | |||||
6. | State Income Tax | Yesý | Noo | |||||
7. | State Employee withholdings | Yesý | Noo | |||||
8. | All other state taxes | Yesý | Noo |
If any of the above have not been paid, state below the tax not paid, the amounts past due and the date of last payment.
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CASE NAME: STARBELLY.COM CASE NO.: 02 B 13221
FOR MAY 14 THRU MAY 31, 2003
TAX QUESTIONNAIRE
Debtors in possession and trustees are required to pay all taxes incurred after the filing of their Chapter 11 petition on an as due basis. Please indicate whether the following post petition taxes or withholdings have been paid currently.
| 1. | Federal Income Taxes | Yeso | Noo | |||||
2. | FICA withholdings | Yeso | Noo | |||||
3. | Employee's withholdings | Yeso | Noo | |||||
4. | Employer's FICA | Yeso | Noo | |||||
5. | Federal Unemployment Taxes | Yeso | Noo | |||||
6. | State Income Tax | Yeso | Noo | |||||
7. | State Employee withholdings | Yeso | Noo | |||||
8. | All other state taxes | Yeso | Noo |
If any of the above have not been paid, state below the tax not paid, the amounts past due and the date of last payment.
NOT APPLICABLE
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DECLARATION UNDER PENALTY OF PERJURY
I, Marc S. Simon, acting as the duly authorized agent for the Debtor in Possession (Trustee) declare under penalty of perjury under the laws of the United States that I have read and I certify that the figures, statements, disbursement itemizations, and account balances as listed in this Monthly Report of the Debtor are true and correct as of the date of this report to the best of my knowledge, information and belief.
| /s/ MARC S. SIMON For the Debtor In Possession (Trustee) | ||
Print or type name and capacity of person signing this Declaration: | ||
Marc S. Simon, Chief Operating Officer Debtors and Debtors-In-Possession |
DATED: October 17, 2003
