UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
IN RE Highlands Insurance Group, Inc. et al CASE NO. 02-13196 through 02-13201
REPORTING PERIOD: 1/31/03
MONTHLY OPERATING REPORT
FILE WITH COURT AND SUBMIT COPY TO UNITED STATES TRUSTEE WITHIN 20 DAYS AFTER
END OF MONTH
Submit copy of report to any official committee appointed in the case.
DOCUMENT EXPLANATION
REQUIRED DOCUMENTS FORM NO. ATTACHED ATTACHED
Schedule of Cash Receipts and Disbursements MOR-1 X
Bank Reconciliation (or copies of debtor's bank reconciliations) MOR-1 (CON'T) X
Copies of bank statements X
Cash disbursements journals
Statement of Operations MOR-2 X
Balance Sheet MOR-3 X
Status of Postpetition Taxes MOR-4 X
Copies of IRS Form 6123 or payment receipt
Copies of tax returns filed during reporting period
Summary of Unpaid Postpetition Debts MOR-4 X
Listing of aged accounts payable
Accounts Receivable Reconciliation and Aging MOR-5 X
Debtor Questionnaire MOR-5 X
I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and
the attached documents are true and correct to the best of my knowledge and
belief.
- -------------------------------- --------------------------------
Signature of Debtor Date
- -------------------------------- --------------------------------
Signature of Joint Debtor Date
/s/ Stephen L. Kibblehouse 2/19/03
- -------------------------------- --------------------------------
Signature of Authorized Individual* Date
Chief Executive Officer
Stephen L. Kibblehouse and General Counsel
- -------------------------------- --------------------------------
Printed Name of Authorized Individual Title of Authorized Individual
*Authorized individual must be an officer, director or shareholder if debtor is
a corporation; a partner if debtor is a partnership; a manager or member if
debtor is a limited liability company.
In re Highlands Insurance Group, Inc et al.
Case No. 02-13196 through 02-13201
Reporting Period: 1/31/2003
SCHEDULE OF CASH RECEIPTS AND DISBURSMENTS
BANK ACCOUNTS
Operating Payables Money Market Money Market Payables Operating
9102663029 1014315825 4484882 AM1P 3752021910 6200064400
Chase-HIGI PNC-HIGI Federated-HIGI State Street-HIGI BofAmer-HIGI Citizens-HIGI
Cash Beginning of Month 91,080 4,613 0 0 37,409 103,186
RECEIPTS
Cash Sales -- -- -- -- -- --
Accounts Receivable -- -- -- -- -- --
Loans & Advances -- -- -- -- -- --
Sales Of Assets -- -- -- -- -- --
Other (Includes Interest) -- 12,000
Transfers (From DIP ACCTS) -- -- -- 4,613
TOTAL RECEIPTS 0 0 0 0 16,613 0
DISBURSEMENTS
Net Payroll -- -- -- -- -- --
Payroll Taxes -- -- -- -- -- --
Sales, Use & Other Taxes -- -- -- -- -- --
Inventory Purchases -- -- -- -- -- --
Secured/Rental/Leases -- -- -- -- -- --
Insurance -- -- -- -- -- --
Adminstrative & Selling -- -- -- -- --
Selling -- -- -- -- -- --
Other (Attach List)* -- -- -- 3,102
*Bank Fees
Owner Draw -- -- -- -- -- --
Transfers (TO DIP ACCOUNTS) -- 4,613 -- --
Professional Fees -- -- -- -- 20,000 --
U.S. Trustee Quarterly Fees -- -- -- -- 1,500 --
Court Costs -- -- -- -- -- --
TOTAL DISBURSEMENTS 0 4,613 0 0 24,602 0
NET CASH FLOW 0 (4,613) 0 0 (7,989) 0
Receipts Less Disbursements
CASH--END OF MONTH 91,080 0 0 0 29,420 103,186
CURRENT MONTH CUMULATIVE FILING TO DATE
Operating Operating Operating Actual Projected Actual Projected
3750487802 6200064419 20569113
BofA-HCSS Citizens-HCSS BankOne-NNHC
Cash Beginning of Month 86,014 89,989 28,894 441,185 412,641 441,599 407,937
RECEIPTS
Cash Sales -- -- -- -- -- --
Accounts Receivable -- -- -- -- -- --
Loans & Advances -- -- -- -- -- --
Sales Of Assets -- -- -- -- -- --
Other (Includes Interest) 1,714 -- 13,714 14,215
Transfers (From DIP ACCTS) -- 4,613 -- 337,877 --
TOTAL RECEIPTS 1,714 0 0 18,327 0 352,092 0
DISBURSEMENTS
Net Payroll -- -- -- -- -- -- --
Payroll Taxes -- -- -- -- -- -- --
Sales, Use & Other Taxes -- -- -- -- -- -- --
Inventory Purchases -- -- -- -- -- -- --
Secured/Rental/Leases -- -- -- -- -- -- --
Insurance -- -- -- -- 100,000 -- 102,000
Adminstrative & Selling -- -- -- 0 1,000 6,200 1,000
Selling -- -- -- -- --
Other (Attach List)* -- -- 3,102 3,500 3,197 17,204
*Bank Fees
Owner Draw -- -- -- -- -- -- --
Transfers (TO DIP ACCOUNTS) -- -- 4,613 -- 337,877 --
Professional Fees -- -- -- 20,000 20,000 26,366 40,000
U.S. Trustee Quarterly Fees -- -- -- 1,500 500 1,500 500
Court Costs -- -- -- -- -- 5,000
TOTAL DISBURSEMENTS 0 0 0 29,215 125,000 375,140 165,704
NET CASH FLOW 1,714 0 0 (10,888) (125,000) (23,048) (165,704)
Receipts Less Disbursements
CASH--END OF MONTH 87,728 89,989 28,894 430,297 287,641 418,551 242,233
DISBURSMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES:
(FROM CURRENT MONTH ACTUAL COLUMN)
TOTAL DISBURSMENTS $29,215
LESS:TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS $ 4,613
PLUS:ESTATE DISBURSMENTS MADE BY OUTSIDE SOURCES (from escrow accounts) $ 0
TOTAL DISBURSMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES $24,602
HIGHLANDS INSURANCE GROUP, INC.
31-Jan-03
Operating Payables Money Market Money Market Payables Operating
9102663029 1014315825 4484882 AM1P 3752021910 6200064400
Chase PNC Federated State Street Bank Of America Citizens Bank
Balance Per Books 91,080.02 -- -- -- 29,419.51 103,186.11
Bank Balance 91,080.02 -- -- -- 43,631.86 103,186.11
(+) Deposits in Transit
(-) Outstanding Checks (14,212.35)
Other (See Below)
Adjusted Bank Balance 91,080.02 -- -- -- 29,419.51 103,186.11
Deposits in Transit
Checks Outstanding #1006 $10,000
#1009 $250
#1010 $250
#1011 $250
#1012 $250
#1013 $250
Other #1014 $2,556.70
#1015 $50
#1016 $105.65
#1017 $250
Total Other
HIGHLANDS CLAIMS AND SAFETY
31-Jan-03
Operating Operating
3750487802 6200064419
Bof A Citizens
Balance Per Books 87,728.31 89,989.00
Bank Balance 87,753.31 89,989.00
(+) Deposits in Transit
(-) Outstanding Checks (25.00)
Other (See Below)
Adjusted Bank Balance 87,728.31 89,989.00
Deposits in Transit
Checks Outstanding
Ck 1092 issued 12/06/01 25.00
Other
Total Other
NORTHWESTERN NATIONAL HOLDING COMPANY
31-Jan-03
Operating
20569113
Bank One
Balance Per Books 28,894.04
Bank Balance 28,894.04
(+) Deposits in Transit
(-) Outstanding Checks --
Other (See Below)
Adjusted Bank Balance 28,894.04
Deposits in Transit
Checks Outstanding
Other
Total Other
Reporting Period 1/31/2003
STATEMENT OF OPERATIONS
(Income Statement) CASE: 02-13198 CASE: 02-13196
NORTHWESTERN NATIONAL HIGHLANDS INSURANCE
HOLDING COMPANY, INC. GROUP, INC
REVENUES CUMULATIVE CUMULATIVE
MONTH FILING TO DATE MONTH FILING TO DATE
Gross Revenues
Less: Returns and Allowances
Net Revenue 0 0 0 0
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add: Cost of Labor
Add: Other Cost (attach schedule)
Less: Ending Inventory
Cost of Goods Sold 0 0 0 0
Gross Profit 0 0 0 0
OPERATING EXPENSES
Insider Compensation *
Insurance (18,682) (56,046)
Management Fees/Bonuses
Taxes - Other
Other (attach schedule) (390) (12,956)
Total Operating Expenses Before Depreciation
Depreciation/Depletion/Amortization
Net Profit (Loss) Before Other Income & Expenses 0 0 (19,072) (69,002)
OTHER INCOME AND EXPENSES
Other Income (attach schedule) 85
Interest Expense (899,713) (2,518,626)
Other Expense (attach schedule) 0 0
Net Profit (Loss) Before Reorganization Items 0 0 (918,785) (2,587,543)
REORGANIZATION ITEMS
Professional Fees (52,370)
U.S. Trustee Quarterly Fees
Interest Earned on Accumulated Cash from Chapter
11 (see continuation sheet)
Gain (Loss) from Sale of Equipment
Other Reorganization Expenses (attach schedule)
Total Reorganization Expenses 0 0 0 (52,370)
Income Taxes
Net Profit (Loss) 0 0 (918,785) (2,639,913)
* "Insider" is defined in 11 U.S.C. Section 101 (31)
STATEMENT OF OPERATIONS
(Income Statement) CASE: 02-13201 CASE: 02-13200 CASE: 02-13199
HIGHLANDS HIGHLANDS CLAIMS AND AMERICAN RELIANCE INC.
SERVICE CORPORATION SAFETY SERVICES, INC
REVENUES CUMULATIVE CUMULATIVE CUMULATIVE
MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE
Gross Revenues
Less: Returns and Allowances
Net Revenue 0 0 0 0 0 0
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add: Cost of Labor
Add: Other Cost (attach schedule)
Less: Ending Inventory
Cost of Goods Sold 0 0 0 0 0 0
Gross Profit 0 0 0 0 0 0
OPERATING EXPENSES
Insider Compensation *
Insurance
Management Fees/Bonuses
Taxes - Other (50) (50)
Other (attach schedule)
Total Operating Expenses Before Depreciation
Depreciation/Depletion/Amortization
Net Profit (Loss) Before Other Income & Expenses 0 0 0 0 (50) (50)
OTHER INCOME AND EXPENSES
Other Income (attach schedule) 1,584 1,715
Interest Expense
Other Expense (attach schedule) 0 0 (1,425) (1,543)
Net Profit (Loss) Before Reorganization Items 0 0 159 172 (50) (50)
REORGANIZATION ITEMS
Professional Fees
U.S. Trustee Quarterly Fees
Interest Earned on Accumulated Cash from Chapter
11 (see continuation sheet)
Gain (Loss) from Sale of Equipment
Other Reorganization Expenses (attach schedule)
Total Reorganization Expenses 0 0 0 0 0 0
Income Taxes
Net Profit (Loss) 0 0 159 172 (50) (50)
* "Insider" is defined in 11 U.S.C. Section 101 (31)
STATEMENT OF OPERATIONS
(Income Statement) CASE: 02-13197
HIGHLANDS HOLDING COMPANY CONSOLIDATING
REVENUES CUMULATIVE CUMULATIVE
MONTH FILING TO DATE MONTH FILING TO DATE
Gross Revenues 0 0
Less: Returns and Allowances 0 0
Net Revenue 0 0 0 0
COST OF GOODS SOLD
Beginning Inventory 0 0
Add: Purchases 0 0
Add: Cost of Labor 0 0
Add: Other Cost (attach schedule) 0 0
Less: Ending Inventory 0 0
Cost of Goods Sold 0 0 0 0
Gross Profit 0 0 0 0
OPERATING EXPENSES
Insider Compensation * 0 0
Insurance (18,682) (56,046)
Management Fees/Bonuses 0 0
Taxes - Other (50) (50)
Other (attach schedule) (390) (12,956)
Total Operating Expenses Before Depreciation 0 0
Depreciation/Depletion/Amortization 0 0
Net Profit (Loss) Before Other Income & Expenses 0 0 (19,122) (69,052)
OTHER INCOME AND EXPENSES
Other Income (attach schedule) 1,584 1,800
Interest Expense (899,713) (2,518,626)
Other Expense (attach schedule) 0 0 (1,425) (1,543)
Net Profit (Loss) Before Reorganization Items 0 0 (918,676) (2,587,421)
REORGANIZATION ITEMS
Professional Fees 0 (52,370)
U.S. Trustee Quarterly Fees 0 0
Interest Earned on Accumulated Cash from Chapter
11 (see continuation sheet) 0 0
Gain (Loss) from Sale of Equipment 0 0
Other Reorganization Expenses (attach schedule) 0 0
Total Reorganization Expenses 0 0 0 (52,370)
Income Taxes
Net Profit (Loss) 0 0 (918,676) (2,692,161)
* "Insider" is defined in 11 U.S.C. Section 101 (31)
CASE: 02-13198 CASE: 02-13196 CASE: 02-13201 CASE: 02-13200
NORTHWESTERN NATIONAL HIGHLANDS INSURANCE HIGHLANDS HIGHLANDS CLAIMS AND
HOLDING COMPANY, INC. GROUP, INC SERVICE CORPORATION SAFETY SERVICES, INC
BREAKDOWN OF "OTHER" CATEGORY CUMULATIVE CUMULATIVE CUMULATIVE CUMULATIVE
MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE
OTHER COSTS
0 0 0 0 0 0 0 0
OTHER OPERATIONAL EXPENSES
Directors Fees (6,366)
Mellon investors services (4,711)
Printing fees (390) (1,879)
0 0 (390) (12,956) 0 0 0 0
0 0 (390) (12,956) 0 0 0 0
OTHER INCOME
Claims service fees 1,584 1,715
Interest income - Federated 85
OTHER EXPENSES
Claims service expense (1,425) (1,543)
CASE: 02-13199 CASE: 02-13197
AMERICAN RELIANCE INC. HIGHLANDS HOLDING COMPANY CONSOLIDATING
BREAKDOWN OF "OTHER" CATEGORY CUMULATIVE CUMULATIVE CUMULATIVE
MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE
OTHER COSTS
0 0 0 0 0 0
OTHER OPERATIONAL EXPENSES
Directors Fees
Mellon investors services
Printing fees
0 0 0 0 0 0
0 0 0 0 0 0
OTHER INCOME
Claims service fees
Interest income - Federated
OTHER EXPENSES
Claims service expense
CONSOLIDATING BALANCE SHEET
The Balance Sheet is to be completed on an accrual basis only.
Pre-petition liabilities must be classified separately from
postpetition obligations.
Reporting Date 01/31/2003
CASE: 02-13198 CASE: 02-13196 CASE: 02-13201
-------------------------------- ------------------------------- --------------------------------
Northwestern National Holding
Company, Inc. Highlands Insurance Group, Inc. Highlands Service Corporation
Book Value at Book Value at Book Value at
End of Current Book Value on End of Current Book Value on End of Current Book Value on
Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date
---------------- ------------- ---------------- ------------- ---------------- -------------
ASSETS
CURRENT ASSETS
Unrestricted Cash and
Equivalents
Restricted Cash and Cash
Equivalents (see
continuation sheet) 28,894 28,894 223,757 248,567
Accounts Receivable (Net) 34,614 34,614
Notes Receivable
Inventories
Prepaid Legal Expenses 45,920 98,290
Professional Retainers
Other Current Assets
(attach schedule) 1,983,370 1,983,370 (22,723,515) (22,667,626)
TOTAL CURRENT ASSETS 2,012,264 2,012,264 $ (22,453,839) $ (22,320,769) $ 34,614 $ 34,614
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 (attach
schedule)
TOTAL OTHER ASSETS -- -- $ -- $ -- $ -- $ --
------------- ------------- ------------- ------------- ------------- -------------
TOTAL ASSETS 2,012,264 2,012,264 $ (22,453,839) $ (22,320,769) $ 34,614 $ 34,614
============= ============= ============= ============= ============= =============
LIABILITIES AND OWNER
EQUITY
LIABILITIES NOT SUBJECT TO
COMPROMISE (Postpetition)
Accounts Payable --
Taxes Payable (refer to
FORM MOR--4)
Wages Payable
Notes Payable
Rent / Leases -
Building/Equipment
Secured Debt / Adequate
Protection Payments
Professional Fees
Amounts Due to Insiders*
Other Postpetition
Liabilities (accrued
interest) 2,518,627
TOTAL POSTPETITION
LIABILITIES -- -- $ 2,518,627 $ -- $ -- $ --
LIABILITIES SUBJECT TO
COMPROMISE (PRE-PETITION)
Secured Debt 47,504,390 47,504,390
Priority Debt
Unsecured Debt 1,124 1,124 75,678,109 75,701,885 23,464 23,464
TOTAL PRE-PETITION
LIABILITIES 1,124 1,124 $ 123,182,499 $ 123,206,275 $ 23,464 $ 23,464
TOTAL LIABILITIES 1,124 1,124 $ 125,701,126 $ 123,206,275 $ 23,464 $ 23,464
OWNER EQUITY
Capital Stock 10,000 10,000 137,181 137,181
Additional Paid-In Capital 120,543,607 120,543,607 228,871,789 228,871,789
Partner's Capital Account
Owner's Equity Account
Retained Earnings -
Pre-Petition (118,542,467) (118,542,467) 11,150 11,150
Retained Earnings -
Postpetition (389,773,831) (387,145,910)
Adjustments to Owner Equity
(attach schedule) 12,609,896 12,609,896
Postpetition Contribution
(Distributions) (Draws)
(attach schedule)
NET OWNER EQUITY 2,011,140 2,011,140 $ (148,154,965) $(145,527,044) $ 11,150 $ 11,150
------------- ------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES AND
OWNER'S EQUITY 2,012,264 2,012,264 (22,453,839) (22,320,769) 34,614 34,614
============= ============= ============= ============= ============= =============
**Insider* is defined in
11 U.S.C. Section 101(31)
-- -- (0) -- --
CASE: 02--13200 CASE: 02--13199 CASE: 02--13197
-------------------------------- ------------------------------- --------------------------------
Higlands Claims and Safety
Services Inc. American Reliance, Inc. Highlands Holding Company
Book Value at Book Value at Book Value at
End of Current Book Value on End of Current Book Value on End of Current Book Value on
Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date
---------------- ------------- ---------------- ------------- ---------------- -------------
ASSETS
CURRENT ASSETS
Unrestricted Cash and
Equivalents 176,014 175,899
Restricted Cash and Cash
Equivalents (see
continuation sheet)
Accounts Receivable (Net) 1,917 176
Notes Receivable
Inventories
Prepaid Legal Expenses
Professional Retainers
Other Current Assets
(attach schedule) 3,742 3,742 2,151,856 2,151,856 (12,000,000) (12,000,000)
TOTAL CURRENT ASSETS $ 181,673 $ 179,817 $ 2,151,856 $ 2,151,856 $ (12,000,000) $ (12,000,000)
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 (attach
schedule)
TOTAL OTHER ASSETS $ -- $ -- $ -- $ -- $ -- $ --
------------- ------------- ------------- ------------- ------------- -------------
TOTAL ASSETS $ 181,673 $ 179,817 $ 2,151,856 $ 2,151,856 $ (12,000,000) $(12,000,000)
============= ============= ============= ============= ============= =============
LIABILITIES AND OWNER
EQUITY
LIABILITIES NOT SUBJECT TO
COMPROMISE (Postpetition)
Accounts Payable
Taxes Payable (refer to
FORM MOR--4)
Wages Payable
Notes Payable
Rent / Leases -
Building/Equipment
Secured Debt / Adequate
Protection Payments
Professional Fees
Amounts Due to Insiders*
Other Postpetition
Liabilities (accrued
interest)
TOTAL POSTPETITION
LIABILITIES $ -- $ -- $ -- $ -- $ -- $ --
LIABILITIES SUBJECT TO
COMPROMISE (PRE-PETITION)
Secured Debt
Priority Debt
Unsecured Debt 4,684 3,000 3,470,397 3,470,447 394 394
TOTAL PRE-PETITION
LIABILITIES $ 4,684 $ 3,000 $ 3,470,397 $ 3,470,447 $ 394 $ 394
TOTAL LIABILITIES $ 4,684 $ 3,000 $ 3,470,397 $ 3,470,447 $ 394 $ 394
OWNER EQUITY
Capital Stock 1,000 1,000 272 272
Additional Paid-In Capital 164,095,489 164,095,489
Partner's Capital Account
Owner's Equity Account
Retained Earnings -
Pre-Petition 175,989 175,817 (165,414,352) ( 165,414,352) (12,000,394) (12,000,394)
Retained Earnings -
Postpetition 50
Adjustments to Owner Equity
(attach schedule)
Postpetition Contribution
(Distributions) (Draws)
(attach schedule)
NET OWNER EQUITY $ 176,989 $ 176,817 $ (1,318,541) $ (1,318,591) $ (12,000,394) $ (12,000,394)
-------------- ------------ ------------- ------------- -------------- -------------
TOTAL LIABILITIES AND
OWNER'S EQUITY 181,673 179,817 $ 2,151,856 $ 2,151,856 $ (12,000,000) $ (12,000,000)
============== ============= ============= ============= ============== =============
**Insider* is defined in
11 U.S.C. Section 101(31) FORM MOR--3
(9/99)
0 -- -- -- -- --
-------------------------------
CONSOLIDATING
Book Value at
End of Current Book Value on
Reporting Period Petition Date
---------------- -------------
ASSETS
CURRENT ASSETS
Unrestricted Cash and
Equivalents 176,014 175,899
Restricted Cash and Cash
Equivalents (see
continuation sheet)
252,651 277,461
Accounts Receivable (Net) 36,531 34,790
Notes Receivable -- --
Inventories -- --
Prepaid Legal Expenses 45,920 98,290
Professional Retainers -- --
Other Current Assets
(attach schedule) (30,584,547) (30,528,658)
TOTAL CURRENT ASSETS $ (30,073,432) $ (29,942,218)
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 (attach
schedule) -- --
TOTAL OTHER ASSETS $ -- $ --
-------------- -------------
TOTAL ASSETS $ (30,073,432) $ (29,942,218)
============== =============
LIABILITIES AND OWNER
EQUITY
LIABILITIES NOT SUBJECT TO
COMPROMISE (Postpetition)
Accounts Payable -- --
Taxes Payable (refer to
FORM MOR--4) -- --
Wages Payable -- --
Notes Payable -- --
Rent / Leases -
Building/Equipment -- --
Secured Debt / Adequate
Protection Payments -- --
Professional Fees -- --
Amounts Due to Insiders* -- --
Other Postpetition
Liabilities (accrued
interest) 2,518,627 --
TOTAL POSTPETITION
LIABILITIES $ 2,518,627 $ --
LIABILITIES SUBJECT TO
COMPROMISE (PRE-PETITION)
Secured Debt 47,504,390 47,504,390
Priority Debt -- --
Unsecured Debt 79,178,173 79,200,314
TOTAL PRE-PETITION
LIABILITIES $ 126,682,563 $ 126,704,704
TOTAL LIABILITIES $ 129,201,190 $ 126,704,704
OWNER EQUITY
Capital Stock 148,453 148,453
Additional Paid-In Capital 513,510,885 513,510,885
Partner's Capital Account -- --
Owner's Equity Account -- --
Retained Earnings -
Pre-Petition (295,770,074) (295,770,246)
Retained Earnings -
Postpetition (389,773,781) (387,145,910)
Adjustments to Owner Equity
(attach schedule) 12,609,896 12,609,896
Postpetition Contribution
(Distributions) (Draws)
(attach schedule) -- --
NET OWNER EQUITY $ (159,274,621) $(156,646,922)
-------------- -------------
TOTAL LIABILITIES AND
OWNER'S EQUITY $ (30,073,432) $ (29,942,218)
============== =============
**Insider* is defined in
11 U.S.C. Section 101(31)
0 --
Northwestern National Holding Company, Inc. Highlands Insurance Group, Inc.
Book Value at Book Value at
End of Current Book Value on End of Current Book Value on
ASSETS Reporting Period Petition Date Reporting Period Petition Date
- ---------------------------------------------------------------------------------------------------------------------------------
Other Current Assets
Investment in Subs 1,986,370 1,986,370 (22,723,671) (22,723,671)
Prepaid Insurance -- 56,045
Taxes Recoverable
Receivables from affiliates 156
Other Assets
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND OWNER EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Other Pospetition Liabilities
-- -- -- --
-- -- -- --
-- -- -- --
Adjustment to Owner Equity
Treasury Stock -- -- 3,999,394 3,999,394
Deferred Comp on Restricted Stock -- 313,189 313,189
Preferred Stock -- -- (16,922,520) (16,922,520)
Pospetition Contributions (Distributions) (Draws)
- ------------------------------------------------------------------------------------------------------------------------------------
Highlands Service Corporation Higlands Claims and Safety Services Inc.
Book Value at Book Value at
End of Current Book Value on End of Current Book Value on
ASSETS Reporting Period Petition Date Reporting Period Petition Date
- ------------------------------------------------------------------------------------------------------------------------------------
Other Current Assets
Investment in Subs -- -- -- --
Prepaid Insurance
Taxes Recoverable 3,742 3,742
Receivables from affiliates
Other Assets
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND OWNER EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Other Pospetition Liabilities
-- -- -- --
-- -- -- --
-- -- -- --
Adjustment to Owner Equity
Treasury Stock -- -- -- --
Deferred Comp on Restricted Stock -- -- -- --
Preferred Stock -- -- -- --
Pospetition Contributions (Distributions) (Draws)
- ------------------------------------------------------------------------------------------------------------------------------------
American Reliance, Inc. Highlands Holding Company
Book Value at Book Value at
End of Current Book Value on End of Current Book Value on
ASSETS Reporting Period Petition Date Reporting Period Petition Date
- ------------------------------------------------------------------------------------------------------------------------------------
Other Current Assets
Investment in Subs 2,074,519 2,074,519 (12,000,394) (12,000,394)
Prepaid Insurance
Taxes Recoverable
Receivables from affiliates 77,337 77,337
Other Assets
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND OWNER EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Other Pospetition Liabilities
-- -- -- --
-- -- -- --
-- -- -- --
Adjustment to Owner Equity
Treasury Stock -- -- -- --
Deferred Comp on Restricted Stock -- -- -- --
Preferred Stock -- -- -- --
Pospetition Contributions (Distributions) (Draws)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATING
Book Value at
End of Current Book Value on
ASSETS Reporting Period Petition Date
- ------------------------------------------------------------------------------
Other Current Assets
Investment in Subs (30,663,176) (30,663,176)
Prepaid Insurance -- 56,045
Taxes Recoverable 3,742 3,742
Receivables from affiliates 77,493 77,337
Other Assets -- --
-- --
-- --
-- --
-- --
-- --
-- --
-- --
- -------------------------------------------------------------------------------------------------------
LIABILITIES AND OWNER EQUITY
- -------------------------------------------------------------------------------------------------------
Other Pospetition Liabilities -- --
-- --
-- --
Adjustment to Owner Equity
Treasury Stock 3,999,394 3,999,394
Deferred Comp on Restricted Stock 313,189 313,189
Preferred Stock (16,922,520) (16,922,520)
Pospetition Contributions (Distributions) (Draws)
- -------------------------------------------------------------------------------------------------------
Restricted Cash: cash that is restricted for a specific use and not available
to fund operations. Typically, restricted cash is segregated
into a separate account, such as an escrow account.
IN RE Highlands Insurance Group, Inc. et al. CASE NO. 02-13196 through 02-13201
Debtor REPORTING PERIOD 1/31/03
STATUS OF POSTPETITION TAXES
The beginning tax liability should be the ending liability from the prior month
or, if this is the first report, the amount should be zero Attach photocopies of
IRS Form 6123 or payment receipt to verify payment or deposit of federal payroll
taxes Attach photocopies of any tax returns filed during the reporting period
Beginning Amount Ending
Tax Withheld or Amount Date Check No. Tax
Liability Accrued Paid Paid or EFT Liability
--------- ------- ---- ---- ------ ---------
FEDERAL
Withholding
FICA-Employee
FICA-Employer
Unemployment
Income
Other:
Total Federal Taxes -0- -0-
STATE AND LOCAL
Withholding
Sales
Excise
UNEMPLOYMENT
REAL PROPERTY
PERSONAL PROPERTY
OTHER:
TOTAL STATE AND LOCAL -0- -0-
TOTAL TAXES -0- -0-
*Debtors have no employees
SUMMARY OF UNPAID POSTPETITION DEBTS
ATTACH AGED LISTING OF ACCOUNTS PAYABLE.
NUMBER OF DAYS PAST DUE
-----------------------
Current 0-30 31-60 61-90 Over 90 Total
------- ---- ----- ----- ------- -----
Accounts Payable
Wages Payable
Taxes Payable
Rent/Leases-Building
Rent/Leases-Equipment
Secured Debt/Adequate Protection Payments
Professional Fees
Amounts Due to Insiders* (Directors Fees)
Other: (Accrued Interest) 899,713 822,726 796,188 2,518,626
Other:
TOTAL POSTPETITION DEBTS 899,713 822,726 796,188 2,518,626
======= ======= ======= =========
EXPLAIN HOW AND WHEN THE DEBTOR INTENDS TO PAY ANY PAST-DUE POSTPETITION DEBTS.
Liabilities, other than accrued interest, will be paid from remaining cash of
Debtor. Accrued interest will not be paid currently.
* "Insider" is defined in 11 U.S.C. Section 101(31).
IN RE Highlands Insurance Group, Inc. et al. CASE NO. 02-13196 through 02-13201
Debtor REPORTING PERIOD 1/31/03
ACCOUNTS RECEIVABLE RECONCILIATION AND AGING
ACCOUNTS RECEIVABLE RECONCILIATION AMOUNT
- ---------------------------------- --------
Total Accounts Receivable at the of the reporting period $ 36,531
+ Amounts billed during the period
- - collected during the period
Total Accounts Receivable at the end of the period 36,531
========
ACCOUNTS RECEIVABLE AGING AMOUNT
- ------------------------- --------
0 - 30 days old 0
31 - 60 days old 1,714
61 - 90 days old 27
91+ days old 34,790
TOTAL ACCOUNTS RECEIVABLE 36,531
AMOUNT CONSIDERED UNCOLLECTIBLE (BAD DEBT) --
ACCOUNTS RECEIVABLE (NET) 36,531
========
DEBTOR QUESTIONNAIRE
MUST BE COMPLETED EACH MONTH YES NO
- ---------------------------- --- --
1. Have any assets been sold or transferred outside the normal course of business X
this reporting period? If yes, provide an explanation below.
2. Have any funds been disbursed from any account other than a debtor in possession X
account this reporting period? If yes, provide an explanation below.
3. Have all postpetition tax returns been timely filed? If no, provide an explanation X
below.
4. Are workers compensation, general liability and other necessary insurance X
coverages in effect? If no, provide an explanation below.