EXHIBIT 99.7
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS
CASE NUMBER: 401-40784-BJH-11
JUDGE: BARBARA J. HOUSER
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
-------- -----
FORT WORTH DIVISION
----------
MONTHLY OPERATING REPORT
MONTH ENDING: DECEMBER 31, 2001
-----------------
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT (ACCRUAL BASIS - 1 THROUGH ACCRUAL BASIS - 7) AND THE ACCOMPANYING
ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT
AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY): IS
BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE.
RESPONSIBLE PARTY:
/s/ WILFORD W. SIMPSON TREASURER
- ---------------------------------------- ----------------------------
Original Signature of Responsible Party Title
WILFORD W. SIMPSON JANUARY 22, 2002
- ---------------------------------------- ----------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER DEBTOR'S ACCOUNTANT
- ---------------------------------------- ----------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER JANUARY 22, 2002
- ---------------------------------------- ----------------------------
Printed Name of Preparer Date
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 1
CASE NUMBER: 401-40784-BJH-11
COMPARATIVE BALANCE SHEET
<Table>
<Caption>
SCHEDULED MONTH MONTH MONTH
ASSETS AMOUNT OCT-01 NOV-01 DEC-01
- ------ ------------ ------------ ------------ ------------
1. Unrestricted Cash (FOOTNOTE) 41,683 150,805 150,799 151,232
2. Restricted Cash
3. Total Cash 41,683 150,805 150,799 151,232
4. Accounts Receivable (Net) (FOOTNOTE) 7,974,696 0 0 0
5. Inventory (FOOTNOTE) 14,793,828 0 0 0
6. Notes Receivable
7. Prepaid Expenses 196,584 0 0 0
8. Other (Attach List) 0 0 0 0
9. Total Current Assets 23,006,791 150,805 150,799 151,232
10. Property, Plant & Equip. (FOOTNOTE) 32,082,187 2,220,574 2,220,574 2,220,574
11. Less: Accumulated Depreciation (7,696,543) (250,320) (250,320) (250,320)
12. Net Property, Plant & Equipment 24,385,644 1,970,254 1,970,254 1,970,254
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 8,369,096 0 0 0
15. Other (Attach List) 13,541,943 45,456,185 45,410,703 45,411,431
16. Total Assets 69,303,474 47,577,244 47,531,756 47,532,917
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable (FOOTNOTE) 26,492 26,492 1,111
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 131,388 131,388 131,388
23. Total Post Petition Liabilities 157,880 157,880 132,499
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 14,891,816 13,358,109 13,448,255
25. Priority Debt (FOOTNOTE) 1,383,756
26. Unsecured Debt 5,139,545 3,048,966 3,048,966 2,733,206
27. Other (Attach List) 197,008,999 197,951,008 197,951,008 197,951,008
28. Total Pre Petition Liabilities 279,417,364 215,891,790 214,358,083 214,132,469
29. Total Liabilities 279,417,364 216,049,670 214,515,963 214,264,968
EQUITY
30. Pre Petition Owners' Equity (210,107,292) (210,107,292) (210,107,292)
31. Post Petition Cumulative Profit Or (Loss) (18,666,125) (18,711,613) (18,685,070)
32. Direct Charges To Equity (Attach Explanation FOOTNOTE) 60,300,991 61,834,698 62,060,311
33. Total Equity (168,472,426) (166,984,207) (166,732,051)
34. Total Liabilities and Equity 47,577,244 47,531,756 47,532,917
</Table>
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 1
COMPARATIVE BALANCE SHEET
<Table>
<Caption>
SCHEDULED MONTH MONTH MONTH
ASSETS AMOUNT OCT-01 NOV-01 DEC-01
- ------ --------- ------ ------ ------
A.
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 0 0 0 0
A. Goodwill: Consolidated Forest
Products (FOOTNOTE) 8,369,096 0 0 0
B.
C.
D.
E.
TOTAL OTHER ASSETS NET OF
AMORTIZATION - LINE 14 8,369,096 0 0 0
A. Intercompany Receivables (FOOTNOTE) 13,541,943 45,456,185 45,410,703 45,411,431
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 13,541,943 45,456,185 45,410,703 45,411,431
POST PETITION LIABILITIES
A. Accrued Liabilities 131,388 131,388 131,388
B.
C.
D.
E.
TOTAL OTHER POST PETITION
LIABILITIES - LINE 22 131,388 131,388 131,388
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 68,508,999 69,451,008 69,451,008 69,451,008
B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000 105,000,000 105,000,000
C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000 23,500,000 23,500,000
D.
E.
TOTAL OTHER PRE PETITION
LIABILITIES - LINE 27 197,008,999 197,951,008 197,951,008 197,951,008
</Table>
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 2
CASE NUMBER: 401-40784-BJH-11
INCOME STATEMENT
<Table>
<Caption>
MONTH MONTH MONTH QUARTER
REVENUES OCT-01 NOV-01 DEC-01 TOTAL
- -------- ------ ------ ------ -------
1. Gross Revenues 0 0 0 0
2. Less: Returns & Discounts 0
3. Net Revenue 0 0 0 0
COST OF GOODS SOLD
4. Material 0
5. Direct Labor 0
6. Direct Overhead 0
7. Total Cost of Goods Sold 0 0 0 0
8. Gross Profit 0 0 0 0
OPERATING EXPENSES
9. Officer / Insider Compensation 0
10. Selling & Marketing 6,324 6,324
11. General & Administrative 550 209 180 939
12. Rent & Lease 0
13. Other (Attach List) 0 0 0 0
14. Total Operating Expenses 550 6,533 180 7,263
15. Income Before Non-Operating
Income & Expense (550) (6,533) (180) (7,263)
OTHER INCOME & EXPENSES
16. Non-Operating (Income) (Att List) (1,168) 0 (26,722) (27,890)
17. Non-Operating Expense (Att List) 40,000 38,955 0 78,955
18. Interest Expense 0
19. Depreciation / Depletion 0
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & (Expenses) (38,832) (38,955) 26,722 (51,065)
REORGANIZATION EXPENSES
23. Professional Fees 0
24. U.S. Trustee Fees 0
25. Other (Attach List) 0
26. Total Reorganization Expenses 0 0 0 0
27. Income Tax 0
28. Net Profit (Loss) (39,382) (45,488) 26,542 (58,328)
</Table>
This form does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANUFACTURING, LP SUPPLEMENT TO
CASE NUMBER: 401-40784-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
<Table>
<Caption>
MONTH MONTH MONTH QUARTER
OPERATING EXPENSES OCT-01 NOV-01 DEC-01 TOTAL
- ------------------ ------ ------ ------ -------
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER OPERATING
EXPENSES - LINE 13 0 0 0 0
OTHER INCOME & EXPENSES
A. Interest Income (1,168) 0 (441) (1,609)
B. Balance Sheet Adjustments (26,281) (26,281)
0
TOTAL NON-OPERATING
INCOME - LINE 16 (1,168) 0 (26,722) (27,890)
A. Loss on sale of assets 40,000 38,955 0 78,955
B. 0
C. 0
D.
TOTAL NON-OPERATING
EXPENSE - LINE 17 40,000 38,955 0 78,955
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER REORGANIZATION
EXPENSES - LINE 25 0 0 0 0
</Table>
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 3
CASE NUMBER: 401-40784-BJH-11
<Table>
<Caption>
CASH RECEIPTS AND MONTH MONTH MONTH QUARTER
DISBURSEMENTS OCT-01 NOV-01 DEC-01 TOTAL
- ----------------- ------ ------ ------ -------
1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE
RECEIPTS FROM OPERATIONS
2. Cash Sales
COLLECTION OF ACCOUNTS RECEIVABLE
3. Pre Petition
4. Post Petition
5. Total Operating Receipts
NON-OPERATING RECEIPTS
6. Loans & Advances (Attach List)
7. Sale of Assets
8. Other (Attach List)
9. Total Non-Operating Receipts
10. Total Receipts
11. Total Cash Available
OPERATING DISBURSEMENTS
12. Net Payroll
13. Payroll Taxes Paid
14. Sales, Use & Other Taxes Paid
15. Secured / Rental / Leases
16. Utilities
17. Insurance
18. Inventory Purchases
19. Vehicle Expenses
20. Travel
21. Entertainment
22. Repairs & Maintenance
23. Supplies
24. Advertising
25. Other (Attach List)
26. Total Operating Disbursements
REORGANIZATION DISBURSEMENTS
27. Professional Fees
28. U.S. Trustee Fees
29. Other (Attach List)
30. Total Reorganization Expenses
31. Total Disbursements
32. Net Cash Flow
33. Cash - End of Month
</Table>
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CASE NAME: KEVCO MANUFACTURING LP SUPPLEMENT TO ACCRUAL BASIS -3
DECEMBER, 2001
CASE NUMBER: 401-40784-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
<Table>
<Caption>
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
-------- ---------- -------- -------- -------- --------- ----------
1. CASH-BEGINNING OF MONTH -- 150,799 3,503,332 -- -- 1,000 3,655,131
RECEIPTS FROM OPERATIONS
2. CASH SALES -- -- --
COLLECTION OF ACCOUNTS RECEIVABLE
3. PRE PETITION -- -- --
4. POST PETITION -- --
5. TOTAL OPERATING RECEIPTS -- -- -- -- -- -- --
NON OPERATING RECEIPTS
6. LOANS & ADVANCES -- --
7. SALE OF ASSETS -- --
8. OTHER 9,494 2,086 5,383 -- -- -- 16,963
INTERCOMPANY TRANSFERS 10,062 (594) (9,468) -- --
SALE EXPENSE REIMBURSEMENT
INCOME TAX REFUND
RENT
PAYROLL TAX ADVANCE RETURNED
MISC 9,494 --
INTEREST INCOME 5,383
9. TOTAL NON OPERATING RECEIPTS 19,556 1,492 (4,085) -- -- -- 16,963
10. TOTAL RECEIPTS 19,556 1,492 (4,085) -- -- -- 16,963
11. CASH AVAILABLE 19,556 152,291 3,499,247 -- -- 1,000 3,672,094
OPERATING DISBURSEMENTS
12. NET PAYROLL 18,582 18,582
13. PAYROLL TAXES PAID -- 6,780 6,780
14. SALES, USE & OTHER TAXES PAID 14 -- 14
15. SECURED/RENTAL/LEASES 4,133 -- 5,789 9,922
16. UTILITIES 216 172 194 582
17. INSURANCE -- 147,956 147,956
18. INVENTORY PURCHASES -- --
19. VEHICLE EXPENSE -- --
20. TRAVEL -- --
21. ENTERTAINMENT -- --
22. REPAIRS & MAINTENANCE -- --
23. SUPPLIES -- --
24. ADVERTISING --
25. OTHER 15,193 887 13,077 -- -- -- 29,157
LOAN PAYMENTS -- -- --
FREIGHT -- --
CONTRACT LABOR -- --
401 K PAYMENTS -- --
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC 15,193 887 13,077 29,157
26. TOTAL OPERATING DISBURSEMENTS 19,556 1,059 192,378 -- -- -- 212,993
REORGANIZATION DISBURSEMENTS
27. PROFESSIONAL FEES -- 131,601 131,601
28. US TRUSTEE FEES -- --
29. OTHER --
30. TOTAL REORGANIZATION EXPENSE -- -- 131,601 -- -- -- 131,601
31. TOTAL DISBURSEMENTS 19,556 1,059 323,979 -- -- -- 344,594
32. NET CASH FLOW -- 433 (328,064) -- -- -- (327,631)
33. CASH- END OF MONTH -- 151,232 3,175,268 -- -- 1,000 3,327,500
</Table>
CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 4
CASE NUMBER: 401-40784-BJH-11
<Table>
<Caption>
SCHEDULED MONTH MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT OCT-01 NOV-01 DEC-01
- ------------------------- --------- ------ ------ ------
1. 0 - 30 0 0 0
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 7,974,696 0 0 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 7,974,696 0 0 0
</Table>
AGING OF POST PETITION MONTH: DECEMBER-01
TAXES AND PAYABLES ---------------
<Table>
<Caption>
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
- ------------- ------ ------- ------- ---- -----
1. Federal --
2. State -- --
3. Local --
4. Other (See Below) 1,111 1,111
5. Total Taxes Payable 1,111 0 0 0 1,111
6. Accounts Payable 0 0
</Table>
MONTH: DECEMBER-01
---------------
STATUS OF POST PETITION TAXES
<Table>
<Caption>
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ----------
1. Withholding ** 0
2. FICA - Employee ** 0
3. FICA - Employer ** 0
4. Unemployment 0
5. Income 0
6. Other (Attach List) 0
7. Total Federal Taxes 0 0 0 0
STATE AND LOCAL
8. Withholding 0 0
9. Sales (FOOTNOTE) 0 0
10. Excise 0
11. Unemployment 0 0
12. Real Property 1,111 1,111
13. Personal Property (FOOTNOTE) 0 0
14. Other (Attach List) 0
15. Total State And Local 1,111 0 0 1,111
16. Total Taxes 1,111 0 0 1,111
</Table>
* The beginning tax liability should represent the liability from the prior
month or, if this is the first operating report, the amount should be zero.
** Attach photocopies of IRS Form 6123 or your FTD coupon and payment receipt
to verify payment of deposit.
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CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 5
CASE NUMBER: 401-40784-BJH-11
The debtor in possession must complete the reconciliation below for each bank
account, including all general, payroll and tax accounts, as well as all savings
and investment accounts, money market accounts, certificates of deposit,
government obligations,
MONTH: DECEMBER-01
------------------
<Table>
<Caption>
BANK RECONCILIATIONS Account # 1 Account # 2 Other Accounts
- -------------------- ----------- ----------- --------------
A. BANK: Summit Bank Summit Bank (Attach List)
B. ACCOUNT NUMBER: 1-0138099 1-0137836 TOTAL
C. PURPOSE (TYPE): Depository Depository
1. Balance Per Bank Statement 4,981 146,251 -- 151,232
2. Add: Total Deposits Not Credited
3. Subtract: Outstanding Checks --
4. Other Reconciling Items --
5. Month End Balance Per Books 4,981 146,251 -- 151,232
6. Number of Last Check Written N/A N/A
</Table>
INVESTMENT ACCOUNTS
<Table>
<Caption>
DATE TYPE OF
BANK, ACCOUNT NAME & NUMBER OF PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE
- --------------------------- ----------- ---------- -------------- -------------
7.
8.
9.
10. (Attach List)
11. Total Investments 0 0
CASH
12. Currency On Hand 0
Reclass to Accounts Payable
13. Total Cash - End of Month 151,232
</Table>
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CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 6
CASE NUMBER: 401-40784-BJH-11
MONTH: DECEMBER-01
------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
Of the Total Disbursements shown for the month, list the amount paid to Insiders
(as defined in Section 101(31)(A) - (F) of the U.S. Bankruptcy Code) and to
Professionals. Also, for payments to Insiders, identify the type of compensation
paid (e.g. salary, bonus, commissions, insurance, housing allowance, travel, car
allowance, etc.). Attach additional sheets if necessary.
INSIDERS
<Table>
<Caption>
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT PAID TO DATE
---- ------- ------ ----------
1. Lee Denham Payroll/severance 134,620
2. Lee Denham Expense Reimb. 254
3. Jim Connors Consulting fees and expenses 114,975
4. Jim Connors Division Sale Bonuses 112,500
5. (Attach List)
6. Total Payments To Insiders 0 362,349
</Table>
PROFESSIONALS
<Table>
<Caption>
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED PAID TO DATE & UNPAID*
---- ----------- -------- ------ ---------- ---------
1. Gordion Group 03/20/01 301,398 0 301,398 0
2.
3.
4.
5. (Attach List)
6. Total Payments To
Professionals 301,398 0 301,398 0
</Table>
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
<Table>
<Caption>
SCHEDULED AMOUNTS TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------ ----------
1. Bank of America N/A 13,448,255
2. Status of Leases Payable None
3.
4.
5. (Attach List)
6. TOTAL 0 0 13,448,255
</Table>
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CASE NAME: KEVCO MANUFACTURING, LP ACCRUAL BASIS - 7
CASE NUMBER: 401-40784-BJH-11
MONTH: DECEMBER-01
---------------
QUESTIONNAIRE
<Table>
<Caption>
YES NO
--- --
1. Have any Assets been sold or transferred outside the normal course of
business this reporting period? X
2. Have any funds been disbursed from any account other than a debtor in
possession account? X
3. Are any Post Petition Receivables (accounts, notes, or loans) due from
related parties? X
4. Have any payments been made on Pre Petition Liabilities this reporting
period? X
5. Have any Post Petition Loans been received by the debtor from any party? X
6. Are any Post Petition Payroll Taxes past due? X
7. Are any Post Petition State or Federal Income Taxes past due? X
8. Are any Post Petition Real Estate Taxes past due? X
9. Are any other Post Petition Taxes past due? X
10. Are any amounts owed to Post Petition creditors delinquent? X
11. Have any Pre Petition Taxes been paid during the reporting period? X
12. Are any wage payments past due? X
</Table>
If the answer to any of the above questions is "Yes", provide a detailed
explanation of each item. Attach additional sheets if necessary.
SEE FOOTNOTE
INSURANCE
<Table>
<Caption>
YES NO
--- --
1. Are Worker's Compensation, General Liability and other necessary insurance
coverages in effect? X
2. Are all premium payments paid current? X
3. Please itemize policies below.
</Table>
If the answer to any of the above questions is "No", or if any policies have
been canceled or not renewed during this reporting period, provide an
explanation below. Attach additional sheets if necessary.
INSTALLMENT PAYMENTS
<Table>
<Caption>
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY
-------------- ------- -------------- --------------------------
Property Lexington, Allianz 5/29/00-3/1/02 Semi-Annual $ 26,485
Group Health Blue Cross/Blue Shield Terminated 8/1/01 N/A
Auto Liberty Mutual 9/1/00-3/1/02 Semi-Annual 3,333
General Liability Liberty Mutual 9/1/00-3/1/02 Semi-Annual 64,657
</Table>
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CASE NAME: KEVCO MANUFACTURING, LP
CASE NUMBER: 401-40784-BJH-11
MONTH: DECEMBER 31, 2001
--------------------
FOOTNOTES SUPPLEMENT ACCRUAL BASIS
<Table>
<Caption>
DUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
- ------ ----------- ----------------------
1 1 Pursuant to the February 12, 2001 Order (1)
3 1 Authorizing Continued Use of Existing Forms and
Records; (2) Authorizing Maintenance of
Existing Corporate Bank Accounts and Cash
Management System; and (3) Extending Time to
Comply with 11 U.S.C. Section 345 Investment
Guidelines, funds in the Bank of America and
Key Bank deposit accounts are swept daily into
Kevco's lead account number 1295026976. The
Bank of America lead account is administered
by, and held in the name of, Kevco Management
Co. (co-debtor, Case No. 401-40788-BJH-11).
Accordingly, all cash receipts and
disbursements flow through Kevco Management's
Bank of America DIP account. A schedule
allocating receipts and disbursements among
Kevco, Inc. and its subsidiaries is included in
this report as a Supplement to Accrual Basis -3.
1 4,5 Pursuant to Asset Purchase Agreements approved
1 10,14A by the Court (see prior Monthly Operating
Reports for details), Debtor has sold most of
its assets.
1 15A Intercompany receivables/payables are from/to
1 27A co-debtors Kevco Management Co. (Case No.
7 3 401-40788-BJH-11), Kevco Distribution, LP (Case
No. 401-40789-BJH-11), Kevco Holding, Inc.
(Case No. 401-40785-BJH-11), DCM Delaware, Inc.
(Case No. 401-40787-BJH-11), Kevco GP, Inc.
(Case No. 401-40786-BJH-11), Kevco Components,
Inc. (Case No. 401-40790-BJH-11), and Kevco,
Inc. (Case No. 401-40783-BJH-11).
1 18 Property tax owing is an accrual only and not
4 9, 13 yet due.
1 24 The direct charges to equity are due to secured
1 32 debt reductions pursuant to asset sales by
Debtor and its co-debtors as well as direct
cash payments. The secured debt owed to Bank of
America by Kevco, Inc. (Case No.
401-40783-BJH-11) has been guaranteed by all of
its co-debtors (see Footnote 1,15A); therefore,
the secured debt is reflected as a liability on
all of the Kevco entities. The charge to equity
is simply an adjustment to the balance sheet.
1 25 Pursuant to Order dated February 12, 2001 and
Supplemental Order dated March 14, 2001,
debtors were authorized to pay pre-petition
taxes, salaries and wages up to a maximum of
$4,300 per employee. Debtors were also (a)
allowed to pay accrued vacation to terminated
employees and (b) permitted to continue
allowing employees to use vacation time as
scheduled.
</Table>