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OFFICE OF THE UNITED STATES TRUSTEE
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IN RE: ) DEBTOR IN POSSESSION OPERATING REPORT
)
SN INSURANCE SERVICES ) REPORT NUMBER 10 Page 1 of 3
) FOR THE PERIOD FROM: 01-Jan-01
DEBTOR ) TO: 31-Jan-01
___________________________________) _________________________________________
CHAPTER 11 CASE NO. SV00-14100-GM )
___________________________________
1. Profit and Loss Statement Please see Attached Schedule A
A. Related to Business Operations:
Gross Sales _____________
Less Sales Returns and Discounts _____________
Net Sales ____________
Less: Cost of Goods Sold
Beginning Inventory at Cost _____________
Add: Purchases _____________
Less: Ending Inventory at Cost _____________
Cost of Goods Sold _____________
Gross Profit ____________
Other Operating Revenue (Specify) ____________
Less: Operating Expenses
Officer Compensation _____________
Salaries & Wages - Other Employees _____________
Total Salaries & Wages _____________
Employee Benefits _____________
Payroll Taxes _____________
Real Estate Taxes _____________
Federal and State Income Taxes _____________
Total Taxes _____________
Rent and Lease Exp. (Real and Personal Property) _____________
Interest Expense (Mortgage, Loan, etc.) _____________
Insurance _____________
Automobile Expense _____________
Utilities (Gas, Electric, Water, Telephone, etc.) _____________
Depreciation and Amortization _____________
Repairs and Maintenance _____________
Advertising _____________
Supplies, Office Expenses, Photocopies, etc. _____________
Bad Debts _____________
Miscellaneous Operating Expenses (Specify) _____________
Total Operating Expenses _____________
Net Gain/(Loss) from Business Operations ____________
B. Not Related to Business Operations ____________
Income:
Interest Income _____________
Other Non-Operating Revenues (Specify) _____________
Gross Proceeds on Sales of Assets _____________
Less: Original Cost of Assets plus Expense of Sale _____________
Net Gain/(Loss) on Sale of Assets _____________
Total Non-Operating Income ____________
Expenses Not Related to Business Operations:
Legal and Professional Fees _____________
Other Non-Operating Revenues (Specify) _____________
Total Non-Operating Income ____________
NET INCOME/(LOSS) FOR PERIOD ============
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Revised April 1989 OPERATING REPORT UST-4
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DEBTOR IN POSSESSION OPERATING REPORT NO. 10
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Page 2 of 3
2. Aging of Accounts Payable and Receivable (exclude pre-petition debt from
accounts payable):
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Accounts Payable Accounts Receivable
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Current Under 30 days $0 $0
Overdue 31-60 days $0 $0
Overdue 61-90 days PLEASE SEE ATTACHED SCHEDULE B
Overdue 91-120 days $0 $0
Overdue 121+ days $0 $0
Total $0 $0
-----------------------------------------
3. Statement of Status of Payments to Secured Creditors and Lessors:
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Post-Petition
Frequency of Payments Not Made
Payments per Amount of --------------------
Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount
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SEE ATTACHED SCHEDULE C
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4. Tax Liability:
Gross Payroll Expense For Period $165,079
Gross Sales for Period Subject to Sales tax $0
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Post Petition Taxes
Date Paid Amount Paid * Still Owing
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Federal Payroll and Withholding Taxes 1/15/01 & 1/31/01 $48,988 0
State Payroll and Withholding Taxes 1/15/01 & 1/31/01 $9,134 0
State Sales and Use Tax N/A $0 N/A
Real Property Taxes N/A $0 N/A
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ALL PAYROLL TAXES PAID BY ADP
* Attach photocopies of depository receipts from taxing
authority or financial institution to verify that such
deposits or payments have been made.
5. Insurance Coverage
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Carrier/ Amount of Policy Premium Paid
Agent Coverage Exp. Date Thru Date
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Worker's Compensation See Schedule D
Liability See Schedule E
Fire and Extended Coverage See Schedule E
Property See Schedule E
Theft See Schedule E
Life (Beneficiary:_________________) See Schedule E
Vehicle See Schedule E
Other See Schedule E
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DEBTOR IN POSSESSION OPERATING REPORT NO. 10
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Page 3 of 3
6. Questions:
A. Has the Debtor provided to any officers, directors, shareholders, or
other principals compensation without the approval of the Office of
the United States Trustee?
______: Yes Explain: ______________________________________
___X__: No
B. Has the Debtor, subsequent to the filing of the petition made any
payments on its pre-petition unsecured debt, except as have been
authorized by the Court?
______: Yes Explain: ______________________________________
___X__: No
7. Statement of Unpaid Professional Fees (Post-Petition Only):
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Type Post-Petition
Name of Professional Professional Unpaid Total
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See Schedule F
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8. Narrative Report of Significant Events And Events Out Of The Ordinary
Course Of Business:
9. Quarterly Fees: (This Fee must be paid to the United States Trustee every
calendar quarter)
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Quarterly
Quarterly Disbursements Quarterly Quarterly
Period Ending for Quarter Fee Date Paid Amount Paid Check No. Fee Still Owing
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12/31/2000 $17,852,466.00 $10,000.00 $0.00 $10,000.00 Note A
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Note A - 4th quarter trustee fee was paid on 2/12/01.
I, Alex Corbett - Chief Financial Officer, declare under penalty of perjury that
the information contained in the above Debtor in Possession Operating Report is
true and complete to the best of my knowledge.
Dated: 3/7/01 Signed: /s/ Alex Corbett
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SCHEDULE A
SNIG, BIG, SNIA and SNIS
Schedule of Operations
One Month ended January 31, 2001
[Bankruptcy filed April 26, 2000]
[unaudited]
(In thousands)
Consolidated
SNIG BIG SNIA SNIS Elimination Total
-------- -------- -------- -------- ------------- --------
Revenues:
Commission Income $ -- $ -- $ -- $ 25 $ -- $ 25
Net investment income 7 (6) 3 92 -- 96
-------- -------- -------- -------- -------- --------
Total Revenues 7 (6) 3 117 -- 121
-------- -------- -------- -------- -------- --------
Expenses
Interest expense 1,096 -- -- -- -- 1,096
Bad debt expense -- -- --(A) (5)(A) -- (5)
General and administrative
Other (139) -- 233 1,136 -- 1,230
-------- -------- -------- -------- -------- --------
Total Expenses 957 -- 233 1,131 -- 2,321
-------- -------- -------- -------- -------- --------
Income (loss) before income taxes and preferred
securities dividends and accretion (950) (6) (230) (1,014) -- (2,200)
Income tax (benefit) expense -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Income (loss) before preferred securities
dividends and accretion (950) (6) (230) (1,014) -- (2,200)
Preferred securities dividends and accretion (1,092) -- -- -- -- (1,092)
Expenses not related to business operations:
Legal and Professional Fees (126) (2) -- -- -- (128)
Other non-operating expenses (13) -- (5) (10) -- (28)
-------- -------- -------- -------- -------- --------
(2,181) (8) (235) (1,024) -- (3,448)
Equity in net income (loss) from subsidiaries (1,272) (1,264) -- -- 2,531 (5)
-------- -------- -------- -------- -------- --------
Net (Loss) Income $ (3,453) $ (1,272) $ (235) $ (1,024) $ 2,531 $ (3,453)
======== ======== ======== ======== ======== ========
(A) Amount reflects a recording of an allowance for bad debt on collection of
commissions receivable. Debtor continues to assert rights of offset and
other methods to effectuate collection.
SCHEDULE B
Superior National Insurance Group, Inc. in Bankruptcy
Aging of Accounts Payable and Receivable
As of Janury 31, 2001
Superior National Insurance Group
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Non-Intercompany Accounts Intercompany Accounts
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Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable
-------------------------------------- -------------------------------------
Current Under 30 days 285,163 -- -- 832,629
Overdue 31-60 days -- 99,166 5,237,080 177,616(D)
Overdue 61-90 days 7,000 36,840 -- 3,581
Overdue 91-120 days 512,894 -- -- 143,001
Overdue 121+ days 32,728 15,395 1 500,009
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Total $ 837,786 $ 151,400[A] $5,237,081 $ 1,656,835
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Business Insurance Group
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Non-Intercompany Accounts Intercompany Accounts
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Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable
-------------------------------------- -------------------------------------
Current Under 30 days 2,307 -- 11,000 --
Overdue 31-60 days -- -- -- 5,237,080(D)
Overdue 61-90 days -- -- -- --
Overdue 91-120 days -- -- -- --
Overdue 121+ days -- 601,265 -- 14,963,854
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Total $ 2,307 $ 601,265 $ 11,000 $20,200,934
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Superior National Insurance Services
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Non-Intercompany Accounts Intercompany Accounts
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Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable
-------------------------------------- -------------------------------------
Current Under 30 days 141,165 64,313 650,932 12,491
Overdue 31-60 days 18,963 382,094 (0) 18,655
Overdue 61-90 days 34,359 156,488 (0) 32,445
Overdue 91-120 days 13,605 690,714 (0) 2,421
Overdue 121+ days 755,238 11,163,378 -- 657,624
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Total $ 963,330 $12,456,988[B] $ 650,931 $ 723,636
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Superior National Insurance Administrators
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Non-Intercompany Accounts Intercompany Accounts
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Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable
-------------------------------------- -------------------------------------
Current Under 30 days 60,524 -- 183,388 --
Overdue 31-60 days (18) -- 196,271 --
Overdue 61-90 days -- -- 36,026 --
Overdue 91-120 days -- -- 145,423 --
Overdue 121+ days 89,789 6,377,198 829,569 98,383
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Total $ 150,295 $ 6,377,198[C] $1,390,677 $ 98,383
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Consolidated
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Non-Intercompany Accounts Intercompany Accounts
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Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable
-------------------------------------- -------------------------------------
Current Under 30 days 489,160 64,313 845,320 845,120
Overdue 31-60 days 18,945 481,260 5,433,351 5,433,351
Overdue 61-90 days 41,359 193,327 36,026 36,026
Overdue 91-120 days 526,500 690,714 145,422 145,422
Overdue 121+ days 877,755 18,157,236 829,570 16,219,870
-------------------------------------- -------------------------------------
Total $1,953,718 $19,586,850 $7,289,689 $22,679,789
-------------------------------------- -------------------------------------
[A] Amounts in accounts payable do not include interest due and accrued on
bank loan and Trust Preferred Securities.
[B] Amounts shown in accounts receivable do not include recorded amounts on
allowance for bad debt on collection of commissions receivable, in which
the Debtor continues to assert rights of offset and other methods to
effectuate collection.
[C] Amounts shown in accounts receivable do not include recorded amounts on
allowance for bad debt on collection of claims admistration fee, in which
the Debtor continues to assert rights of offset and other methods to
effectuate collection.
[D] Amounts include a payment of $5.4 million pursuant to an Order Authorizing
Release of Escrowed Funds to the Bank Group Pursuant to Stipulation dated
November 9, 2000. The 5.4 million was paid from BIG for interest expense
accrued on SNIG.
SCHEDULE C
JANUARY 31,2001
SNIG
3. Statement of Status of Payments to Secured Creditors and Lessors:
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Post-Petition
Frequency of Payments Not Made
Payments per Amount of ---------------------------
Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount
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Dell Financial Services Monthly $ 8,931.85 12/20/2000 See Note B
IKON Office Solutions, Inc. / IOS Capital Monthly $ 1,395.65 11/23/00, 11/15/00 See Note B
Pitney Bowes Credit Corp. Monthly $ 4,810.67 12/10/00, 12/20/00, 12/1/00 See Note B
Pitney Bowes Credit Corp. Quarterly $ 7,394.15 12/10/00, 11/10/00 See Note B
Stringer business Systems Inc. Monthly $ 2,163.51* 12/1/2000 See Note B
12/24/00, 12/6/00, 12/11/00
Toshiba America Information Sys. Monthly $ 8,170.39 12/1/00, 12/18/00 See Note B
Trizec Kahn Properties Monthly $226,076.40 2/1/2001 See Note C
Bettman Real Estate Management Monthly $ 1,932.33 2/1/2001 See Note A & Note C
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Amounts above do not include bank loan in default, which are partially secured
by stock of Superior National Insurance Group, Inc. and its subsidiaries.
* Monthly payment is based on number of copies made for the previous month,
therefore payment varies each month.
Note A: Per the CLO, they have discontinued paying the lease as of 4/2000 and
Superior has not occupied this office for a number of months.
Note B: These leases were withdrawn from the motion filed on January 19, 2001
based upon the representation that the CLO will remain current on all
monetary obligations under the leases until the Debtors receive
instruction from the CLO on the assumption or rejection of these leases
by April 15, 2001.
Note C: These leases were automatically deemed rejected by operation of law.
BIG
3. Statement of Status of Payments to Secured Creditors and Lessors:
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Post-Petition
Frequency of Payments Not Made
Payments per Amount of ---------------------------
Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount
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Dell Financial Services Monthly $ 52,321.29 12/5/2000 See Note C
Zodiac Development Monthly $ 9,454.31 1/1/2001 See Note D
Koger Realty Services Inc.
(San Diego, CA) Monthly $ 26,600.89 1/1/2001 See Note D
Colonial Property Trust Monthly $ 5,433.98 1/1/2001 See Note B & Note D
Fults Realty Corporation Monthly $ 15,362.95 1/1/2001 See Note A & Note D
Woodland III Holding, LLC / c/o
Wasatch Property Management Monthly $ 12,940.15 1/1/2001 See Note B & Note D
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Amounts above do not include bank loan in default, which are partially secured
by stock of Superior National Insurance Group, Inc. and its subsidiaries.
Note A: Per the CLO, they are in the process of moving and/or selling the
furniture & fixtures at this location and expect to vacate this premise
by the end of 11/2000. The CLO has discontinued paying rent for this
lease as of 7/2000.
Note B: Per the CLO, they have discontinued paying the lease as of 4/2000 and
Superior has not occupied this office for a number of months.
Note C: This lease was withdrawn from the motion filed on January 19, 2001 based
upon the representation that the CLO will remain current on all monetary
obligations under the lease until the Debtors receive instruction from
the CLO on the assumption or rejection of this lease by April 15, 2001.
Note D: These leases were automatically deemed rejected by operation of law.
SNIA
3. Statement of Status of Payments to Secured Creditors and Lessors:
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Post-Petition
Frequency of Payments Not Made
Payments per Amount of ---------------------------
Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount
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NONE
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Amounts above do not include bank loan in default, which are partially secured
by stock of Superior National Insurance Group, Inc. and its subsidiaries.
SNIS
3. Statement of Status of Payments to Secured Creditors and Lessors:
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Post-Petition
Frequency of Payments Not Made
Payments per Amount of ---------------------------
Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount
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NONE
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Amounts above do not include bank loan in default, which are partially secured
by stock of Superior National Insurance Group, Inc. and its subsidiaries.
Superior National Insurance Group, Inc. in Bankruptcy SCHEDULE D
Debtor in Possession
Insurance Coverage
As of January 31, 2001
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Amount of Policy Premium Paid
State Carrier Agent Coverage Exp Date Thru Date
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Arizona Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01
Arkansas Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01
California State Compensation
Insurance Fund Di Buduo & De Fendis Statutory 01-Jun-01 01-Jun-01
Colorado Pinnacol Assurance Di Buduo & De Fendis Statutory 01-Jun-01 01-Jun-01
Georgia Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01
Illinois Liberty Mutual Group Di Buduo & De Fendis Statutory 12-Jul-01 12-Jul-01
Kansas Travelers Insurance Di Buduo & De Fendis Statutory 11-Aug-01 11-Aug-01
Company
Missouri Travelers Property &
Casualty Di Buduo & De Fendis Statutory 02-Jun-01 02-Jun-01
New Jersey Granite State Insurance
Company Di Buduo & De Fendis Statutory 02-Jun-01 02-Jun-01
Oklahoma State Insurance Fund Di Buduo & De Fendis Statutory 15-Nov-01 15-Nov-01
Pennsylvania State Workrmens'
Insurance Fund Di Buduo & De Fendis Statutory 03-Jun-01 03-Jun-01
Texas Texas W/C Insurance
Fund Di Buduo & De Fendis Statutory 18-Jul-01 18-Jul-01
Note 1: The policies for Florida, Indiana, Louisiana, New Mexico, New York,
Oregon, Tennessee, Utah, and Wisconsin were all requested to be cancelled in
December 2000.
Note 2: Within all of the policies identified above the following entities are
covered for Workers' Compensation: SNIG, BIG, SNIA, and SNIS.
Note 3: The policies for Arkansas, Arizona, Georgia, & Illinois are all covered
on one policy, which is inforce, even though AR & GA offices are closed.
January 31, 2001 Schedule E
Policy Exp. Premium paid
Company Agent Type of Insurance Amount of Coverage Date thru date
- ------- ----- ----------------- ------------------ ----------- -----------
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Commercial General Liability
Package
General Liability $1 million per occurrence 11/13/2001 11/13/2001
$2 million aggregate
Advertising Injury excluded
Employee Benefit Liability $1 million per claim
$2 million aggregate
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Automobile
Liability $1 million 11/13/2001 11/13/2001
Medical $5,000
Uninsured Motorist $500,000
Physical Damage Actual value less $500
deductible
SNIG, BIG, SNIS, & SNIA Carpenter Moore Directors & Officers (run-off)
Reliance $5,000,000 5/1/2003 5/1/2003
Lloyd's of London $5,000,000 xs $5,000,000
Gulf Insurance Company $10,000,000 xs $10,000,000
Executive Risk Indemnity $10,000,000 xs $20,000,000
Philadelphia Indemnity $10,000,000 xs $30,000,000
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Employer Practice Liability $1 million per loss 12/10/2001 12/10/2001
& in the aggregate
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Fiduciary Liability $5 million per loss 12/10/2001 12/10/2001
& in the aggregate
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Commercial Umbrella $10 million per occurrence 11/13/2001 11/13/2001
$10 million aggregate
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Excess Liability $10 million per occurrence 11/13/2001 11/13/2001
$10 million aggregate
SNIG, BIG, SNIS, & SNIA DiBudio & DeFendis Accident Policy (Life/Travel) $1 million to $3 million 1/15/2002 1/15/2002
(depends on rank of
officer)
BIG only DiBudio & DeFendis Professional Liability Run Off $10 million per loss 12/10/2004 12/10/2004
BIG companies only/acts b/f & in the aggregate
12/10/99
*$500,000 deductible
SCHEDULE F
JANUARY 31, 2001
SNIG, BIG, SNIS, SNIA
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Type Post-Petition
Name of Professional Professional Unpaid Total
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Paul, Weiss, Rifkind, Wharton & Garrison Legal fees $267,295 See Note A
Tillinghast-Towers, Perrin Actuaries $ 32,261 See Note B
Latham & Watkins Counsel for Official Committee of Unsecured Creditors $ 40,100
Steve Elridge Tax consulting $ 21,334
Quinn Emanuel Urquhart Oliver & Hedges LLP Legal fees $194,308
Tharpe & Howell Legal fees $ 1,163
Mannat Phelps Legal fees $ 29,606
KPMG Peat Marwick Audit & consulting fees $ 57,714
Christopher Maisel Facilitator fees $125,000 See Note C
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Note A - $42,408.81 was subsequently paid on February 2, 2001.
Note B - Fees were approved for payment by the Bankruptcy Court in December 2000
and subsequently paid on February 16, 2001.
Note C - Outstanding fees as of January 31, 2001 are estimated and provided by
Christopher Maisel.