EXHIBIT 99.1
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS FOR
THE PERIOD ENDED: 12-31-97
IN RE: :
CASE NO: 96-15177
Fretter, Inc. : Chapter 11
Judge Morgenstern-Clarren
:
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Debtor
:
As debtor in possession, I affirm:
1. That I have reviewed the financial statements attached hereto, consisting
of:
X Operating Statement (Form 2)
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X Balance Sheet (Form 3)
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X Summary of Operations (Form 4)
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X Monthly Cash Statements (Form 5)
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X Statement of Compensation (Form 6)
-----
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and that they have been prepared in accordance with normal and customary
accounting practices, and fairly and accurately reflect the debtor's financial
activity for the period stated:
2. That the insurance as described in Section 4 of the Operating Instructions
and Reporting Requirements for Chapter 11 Cases is in effect; and, (if not,
attach written explanation)
3. That all postpetition taxes as described in Sections 1 and 14 of the
Operating Instructions and Reporting Requirements For Chapter 11 cases are
current. (If not, attach written explanation)
4. No professional fees (attorney, accountant, etc.) have been paid without
specific court authorization. Explain on separate sheet if not true.
I hereby certify, under penalty of perjury, that the information provided herein
is true and correct to the best of my information and belief.
Dated: 1/17/98 /s/ J. Michael McLean
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Debtor in Possession
Controller 810-220-5007
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Title Phone
OPERATING STATEMENT (P&L)
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(Accrual Basis)
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Debtor: Fretter Inc. Case No: 96-15177
Month Ending: 12/31/97
Total
Current Month Since Filing
Total Revenue/Sales 0 532,663
Cost of Sales 0 505,226
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Gross Profit 0 27,437
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EXPENSES:
--------
Officer Compensation 7,897 285,213
Salary Expenses other Employees 8,149 359,708
Court-Ordered Stay Bonus 162,921
Employee Benefits & Pensions 0
Payroll Taxes 1,003 61,804
Other Taxes 87,574
Rent and Lease Expense 10,898 43,806
Interest Expense 106,698 4,066,331
Insurance (12,059) 538,655
Automobile and Truck Expense 0
Utilities (gas, electric, phone alarms) 0 153,850
Depreciation 0
Travel and Entertainment 12,445
Repairs and Maintenance 9,984 248,213
Advertising 0
Supplies, Office Expenses, etc. 31,496 264,247
Other: Specify Director & Trustee Fees 6,566 112,319
Other: Specify Misc. Fees 3,095
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TOTAL EXPENSES: 170,542 6,400,181
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NET OPERATING PROFIT/(LOSS) (170,542) (6,372,744)
========== ===========
Add: Non-Operating Income:
Interest Income 3,961 23,394
Gain/Loss on Sale of Real Estate (19,672) 7,169,144
Other Income 62,662 1,837,407
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TOTAL 46,951 9,029,945
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Less: Non-Operating Expenses:
Professional Fees 214,623 2,217,473
Other 24,159 621,092
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NET INCOME / (LOSS) (362,373) (181,364)
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BALANCE SHEET *
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Debtor: Fretter, Inc. Case No: 96-15177
Month Ending: 12/31/97
ASSETS: Current Month Prior Month At Filing
Cash: 958,714 1,359,713 89,252
Inventory: 791,999
Accounts Receivable: ** 34,574,764 34,576,715 35,930,804
Insider Receivables 7,414,781 7,414,781 7,424,547
Land and Buildings: 19,500,676 20,500,676 49,365,801
Furniture, Fixtures & Equip: 418,000
Accumulated Depreciation: (4,751,853) (5,074,318) (10,623,681)
Other: Prepaids & misc. 937,682 1,148,522 807,689
Other: Utility deposits 39,000 39,699
----------- ----------- -----------
TOTAL ASSETS: 58,673,764 59,965,788 84,204,411
=========== =========== ===========
LIABILITIES:
Postpetition Liabilities:
Accounts Payable: 136,792 143,846
Wages and Salaries: 8,912 9,983
Taxes Payable: 112,626 102,267
Other: 1,728,936 2,577,720 1,390
----------- ------------ -----------
TOTAL Postpetition Liab. 1,987,266 2,833,816 1,390
=========== =========== ===========
Secured Liabilities:
Subject to Postpetition
Collateral or Financing Order 7,912,174 7,912,174 29,002,401
All other Secured Liab. 3,064,067 3,071,932 7,371,875
----------- ----------- -----------
TOTAL Secured Liabilities: 10,976,241 10,984,106 36,374,276
=========== =========== ===========
Prepetition Liabilities:
Taxes & Other Priority Liab. 879,195 879,195 1,132,770
Unsecured Liabilities 6,512,730 6,543,246 6,849,397
Other: Accrued Liabilities 4,642,358 4,687,078 5,449,917
----------- ----------- -----------
TOTAL Prepetition Liab. 12,034,283 12,109,519 13,432,084
=========== =========== ===========
Redeemable Preferred Stock 48,265,040 48,265,040 48,265,040
----------- ----------- -----------
Equity:
Owners' Capital: 1,692,451 1,692,451 1,692,451
Retained Earnings-Pre Pet. (16,100,153) (16,100,153) (15,560,830)
Retained Earnings-Post Pet. (181,364) 181,009 0
----------- ----------- -----------
TOTAL Equity: (14,589,066) (14,226,693) (13,868,379)
=========== =========== ===========
TOTAL LIABILITIES
AND EQUITY: 58,673,764 59,965,788 84,204,411
=========== =========== ===========
______________________________
* Preliminary Estimate
** Includes contingent receivable from Silo, Inc.
Collectibility indeterminate
SUMMARY OF OPERATIONS
---------------------
Period Ended: 12/31/97
Debtor: Fretter, Inc. Case No: 96-15177
Schedule of Postpetition Taxes Payable
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Beginning Accrued/ Payments/ Ending
Balance Withheld Deposits Balance
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Income Taxes Withheld:
Federal: 0 1,913 2,931 (1,018)
State: 824 559 824 559
Local:
FICA Withheld: 0 945 945 0
Employers FICA: 0 945 945 0
Unemployment Tax:
Federal: 2 0 0 2
State: 271 56 327
Sales, Use & Excise Taxes: 0 0
Property Taxes: 101,170 11,586 112,756
Workers' Compensation
Other:
------- ------ ------- -------
TOTALS 102,267 16,004 5,645 112,626
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AGING OF ACCOUNTS RECEIVABLE
AND POSTPETITION ACCOUNTS PAYABLE
Age in Days 0-30 30-60 Over 60
PostPetition
Accounts Payable ______ ______ ______
Accounts Receivable ______ ______ ______
For all postpetition accounts payable over 30 days old, please attach a sheet
listing each such account, to whom the account is owed, the date the account was
opened, and the reason for non-payment of the account.
Describe events or factors occurring during this reporting period materially
affecting operations and formulation of a Plan of Reorganization.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
MONTHLY CASH STATEMENT
Debtor: Fretter, Inc. Statement for the period:
Case #: 96-15177 From: 12-1-97 To: 12-31-97
Cash Activity Analysis (Cash Basis Only):
General Payroll Tax Cash Coll. B.T.
Acct. Acct. Acct. Acct. B.T. Direct(1)
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A. Beginning Balance: 235,518.36 10,884.40 5,827.16 0.00 0.00
------------ --------- --------- ---------- ---------
B. Receipts. Attach
Separate Schedule: 2,344,373.02 15,086.20 5,634.70 0.00 7,865.10
------------ --------- --------- ---------- ---------
C. Balance Available
(A + B): 2,579,391.38 25,970.60 11,461.86 0.00 7,865.10
------------ --------- --------- ---------- ---------
D. Less Disbursements
Attach Separate
Schedule: 2,400,763.50 16,302.81 5,645.03 0.00 7,865.10
------------ --------- --------- ---------- ---------
E. ENDING BALANCE
(C-D) 179,127.88 9,667.79 5,816.83 0.00 0.00
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(PLEASE ATTACH COPIES OF MOST RECENT RECONCILED BANK STATEMENTS FROM EACH
ACCOUNT)
General Account:
1. Depository Name & Location Michigan National Bank, Brighton, MI
2. Account Number 4707-38120-0
Payroll Account:
1. Depository Name & Location Michigan National Bank, Brighton, MI
2. Account Number 4707-38024-4
Tax Account:
1. Depository Name & Location Michigan National Bank, Brighton, MI
2. Account Number 4707-38128-3
Other monies on hand (specify type and location) (i.e., CD's petty cash):
BT Collateral Acct. - Old Kent Bank, Acct. No 229377
BT Direct - BT cash collateral is forwarded directly to B.T.
Date:
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Debtor in Possession
MONTHLY CASH STATEMENT
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Debtor: Fretter, Inc. Statement for the period:
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Case No.: 96-15177 From: 12-1-97 To: 12-31-97
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Cash Activity Analysis (Cash Basis Only):
General Tax
Savings Savings
Acct. Acct.
------------ ---------- ---------- ---------- ----------
A. Beginning Balance: 1,010,871.33 96,611.42 0.00
------------ ---------- ---------- ---------- ----------
B. Receipts. Attach Separate Schedule: 753,242.38 190.56
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C. Balance Available (A+B): 1,764,113.71 96,801.98 0.00 0.00 0.00
------------ ---------- ---------- ---------- ----------
D. Less Disbursements Attach separate
schedule: 1,000,012.50 96,801.98
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E. Ending Balance (C-D): 764,101.21 0.00 0.00 0.00 0.00
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(PLEASE ATTACH COPIES OF MOST RECENT RECONCILED BANK STATEMENTS FROM EACH
ACCOUNT)
General Savings Account
1. Depository Name & Location Michigan National Bank, Brighton, MI
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2. Account Number 4707-38293-5
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Tax Savings Account
1. Depository Name & Location Michigan National Bank, Brighton, MI
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2. Account Number 4707-38357-8
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Other monies on hand (specify type and location)(i.e., CD's petty cash):
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Date:
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Debtor in Possession
FORM 5
-ix-
MONTHLY STATEMENT OF COMPENSATION
---------------------------------
The following information is to be provided for each shareholder,
officer, director, manager, insider, or owner that is employed by the debtor in
possession. Attach additional pages if necessary.
Name: J. Michael McLean Capacity: Principal
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X Officer
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Director
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Insider
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Detailed Description of Duties: As Controller, directs accounting, payroll,
benefit plans and tax filings as well as assists in cash flow planning
Current Compensation Paid:
Weekly or Monthly
9,167.00
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Current Benefits Received:
Weekly or Monthly
Vacation Pay ------ --------
Holiday Pay ------ --------
Retirement ------ --------
Company Vehicle ------ --------
Entertainment ------ --------
Travel ------ --------
Other Benefits ------ --------
CURRENT TOTAL:
Weekly or Monthly
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Dated: ------------------------------------
-------------------- Principal, Officer, Director, Insider
LIST OF OMITTED SCHEDULES
1. Schedule of Michigan National Bank December 1997 Cash Receipts (Account
Number 4707-38120-0)
2. Schedules of Michigan National Bank December 1997 Cash Disbursements,
Account Reconciliation and Outstanding Check List (Account Number 4707-38120-0)
3. Michigan National Bank Statement of Account for the Period December 1, 1997
to December 31, 1997 (Account Number 4707-38120-0)
4. Michigan National Bank Statement of Account for the Period December 1, 1997
to December 31, 1997 (Account Number 4707-38024-4)
5. Schedules of Michigan National Bank Payroll Account December 1997 Cash
Receipts and Disbursements and Account Reconciliation (Account Number
4707-38024-4)
6. Schedules of Michigan National Bank Tax Account December 1997 Cash Receipts
and Disbursements and Account Reconciliation (Account Number 4707-38128-3)
7. Michigan National Bank Statement of Account for the Period December 1, 1997
to December 31, 1997 (Account Number 4707-38128-3)
8. Schedule of Bankers Trust December 1997 Cash Receipts
9. Schedules of Michigan National Bank General Savings Account December 1997
Cash Receipts and Disbursements (Account Number 4707-38293-5)
10. Michigan National Bank Statement of Account for the Period December 1, 1997
through December 31, 1997 (Account Number 4707-38293-5)
11. Schedule of Michigan National Bank Tax Savings Account December 1997 Cash
Receipts and Disbursements (Account Number 4707-38357-8)
12. Michigan National Bank Statement of Account for the Period December 1, 1997
to December 31, 1997 (Account Number 4707-38357-8)