EXHIBIT 99.1
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS FOR
THE PERIOD ENDED: 5-31-98
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: 6/11/98 /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: 5/31/98
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 8,321 326,078
Salary Expenses other Employees 8,403 406,100
Court-Ordered Stay Bonus 0 216,041
Employee Benefits & Pensions 0
Payroll Taxes 1,669 77,348
Other Taxes 87,574
Rent and Lease Expense 7,362 94,760
Interest Expense 7,209 345,237
Insurance 10,683 596,490
Automobile and Truck Expense 0
Utilities (gas, electric, phone, alarms) 1,200 169,199
Computer Service Bureau 0 25,366
Travel and Entertainment 747 18,734
Repairs and Maintenance 1,971 302,049
Advertising 0
Supplies, Office Expenses, etc. 18,139 374,009
Other: Specify Director & Trustee Fees 6,566 148,899
Other: Other Fees 1,550 8,145
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TOTAL EXPENSES: 73,820 7,196,029
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NET OPERATING PROFIT/(LOSS) (73,820) (7,168,592)
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Add: Non-Operating Income:
Interest Income 2,462 38,843
Gain/Loss on Sale of Real Estate (206,360) 7,998,915
Other Income 20,733 1,957,075
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TOTAL (183,165) 9,994,833
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Less: Non-Operating Expenses:
Professional Fees 181,801 3,829,588
Other 7,550 645,106
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NET INCOME / (LOSS) (446,336) (1,648,453)
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BALANCE SHEET *
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Debtor: Fretter, Inc. Case No: 96-15177
Month Ending: 5/31/98
ASSETS: Current Month Prior Month At Filing
Cash: 861,004 1,046,634 89,252
Inventory: 791,999
Accounts Receivable: ** 34,475,770 34,475,770 35,930,804
Insider Receivables 3,553,787 3,553,787 7,424,547
Land and Buildings: 7,629,633 9,621,311 49,365,801
Furniture, Fixtures & Equip: 418,000
Accumulated Depreciation (1,513,474) (1,569,597) (10,623,681)
Other: Prepaids & misc. 2,042,706 1,922,547 807,689
Other: Utility deposits 10,005 10,390
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TOTAL ASSETS: 47,059,431 49,060,842 84,204,411
=========== =========== ===========
LIABILITIES:
Postpetition Liabilities:
Accounts Payable: 51,381 70,451
Wages and Salaries: 8,283 8,680
Taxes Payable 75,222 81,169
Other: Prof. fees, interest, etc. 3,071,656 3,110,647 1,390
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TOTAL Postpetition Liab.: 3,206,542 3,270,947 1,390
=========== =========== ===========
Secured Liabilities:
Subject to Postpetition
Collateral or Financing Order 0 0 29,002,401
All Other Secured Liab. 324,392 1,521,701 7,371,875
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TOTAL Secured Liabilities: 324,392 1,521,701 36,374,276
=========== =========== ===========
Prepetition Liabilities:
Taxes & Other Priority Liab. 630,152 755,152 1,132,770
Unsecured Liabilities 6,185,241 6,305,008 6,849,397
Other: Accrued Liabilities 4,450,796 4,499,930 5,449,917
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TOTAL Prepetition Liab. 11,266,189 11,560,090 13,432,084
=========== =========== ===========
Redeemable Preferred Stock 48,265,040 48,265,040 48,265,040
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Equity:
Owners' Capital: 1,692,451 1,692,451 1,692,451
Retained Earnings-Pre Pet. (16,047,270) (16,047,270) (15,560,830)
Retained Earnings-Post Pet. (1,648,453) (1,202,117) 0
----------- ----------- -----------
TOTAL Equity: (16,003,272) (15,556,936) (13,868,379)
=========== =========== ===========
TOTAL LIABILITIES
AND EQUITY: 47,059,431 49,060,842 84,204,411
=========== =========== ===========
______________________________
* Preliminary Estimate
** Includes contingent receivable from Silo, Inc.
Collectibility indeterminate
SUMMARY OF OPERATIONS
---------------------
Period Ended: 5/31/98
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 3,093 3,093 0
State: 931 753 931 753
Local:
FICA Withheld: 0 1,325 1,325 0
Employers FICA: 0 1,325 1,325 0
Unemployment Tax:
Federal: 74 21 95
State: 693 323 1,016
Sales, Use & Excise Taxes 0 0
Property Taxes 79,471 3,578 9,691 73,358
Workers' Compensation
Other:
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TOTALS 81,169 10,418 16,365 75,222
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AGING OF ACCOUNTS RECEIVABLE
AND POSTPETITION ACCOUNTS PAYABLE
Age in Days 0-30 30-60 Over 60
PostPetition
Accounts Payable 51,381
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Accounts Receivable 38,029,557
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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.
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AGING
POST-PETITION PAYABLES OVER 30 DAYS
5/31/98
POST-PETITION SERVICE
CONTRACT REPAIR CLAIM 51,381 PAYMENT TIMING WILL BE PART OF FINAL PLAN
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51,381
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MONTHLY CASH STATEMENT
Debtor: Fretter, Inc. Statement for the period:
Case #: 96-15177 From: 5-1-98 To: 5-31-98
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: 259,625.83 6,842.14 5,913.12 0.00 0.00
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B. Receipts. Attach
Separate Schedule: 181,892.35 14,848.75 8,864.68 0.00 0.00
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C. Balance Available
(A + B): 441,518.18 21,690.89 14,777.80 0.00 0.00
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D. Less Disbursements
Attach separate
schedule: 374,869.01 12,143.49 6,673.22 0.00 0.00
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E. Ending Balance
(C-D) 66,649.17 9,547.40 8,104.58 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: 5-1-98 To: 5-31-98
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Cash Activity Analysis (Cash Basis Only):
General Tax Certificate
Savings Savings of
Acct. Acct. Deposit
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A. Beginning Balance: 774,252.92 0.00 0.00
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B. Receipts. Attach Separate Schedule: 2,461.62 0.00 600,000.00
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C. Balance Available (A+B): 776,714.54 0.00 600,000.00 0.00 0.00
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D. Less Disbursements Attach separate
schedule: 600,012.00 0.00
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E. Ending Balance (C-D): 176,702.54 0.00 600,000.00 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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Certificate of Deposit
1. Depository Name & Location Michigan National Bank, Brighton, MI
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2. Account Number 2492 23637 3
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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
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 May 1998 Cash Receipts (Account
Number 4707-38120-0)
2. Schedules of Michigan National Bank May 1998 Cash Disbursements,
Account Reconciliation and Outstanding Check List (Account Number 4707-38120-0)
3. Michigan National Bank Statement of Account for the Period May 1, 1998
to May 31, 1998 (Account Number 4707-38120-0)
4. Michigan National Bank Statement of Account for the Period May 1, 1998
to May 31, 1998 (Account Number 4707-38024-4)
5. Schedules of Michigan National Bank Payroll Account May 1998 Cash Receipts
and Disbursements and Account Reconciliation (Account Number 4707-38024-4)
6. Schedules of Michigan National Bank Tax Account May 1998 Cash Receipts and
Disbursements and Account Reconciliation (Account Number 4707-38128-3)
7. Michigan National Bank Statement of Account for the Period May 1, 1998
to May 31, 1998 (Account Number 4707-38128-3)
8. Schedule of Bankers Trust May 1998 Cash Receipts
9. Schedules of Michigan National Bank General Savings Account May 1998
Cash Receipts and Disbursements (Account Number 4707-38293-5)
10. Michigan National Bank Statement of Account for the Period May 1, 1998
through May 31, 1998 (Account Number 4707-38293-5)