/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040925.mbx T R O U B L E D C O M P A N Y R E P O R T E R Saturday, September 25, 2004, Vol. 8, No. 207 Headlines AMES DEPARTMENT: July 2004 Monthly Operating Report AMES DEPARTMENT: August 2004 Monthly Operating Report AVADO BRANDS: Posts $4.3 Million Net Loss in August 2004 DIVINE INC: Releases June to August 2004 Monthly Operating Reports ENRON CORP: Releases April 2004 Monthly Operating Report FAO INC: Reports Sitting on $38.9 Million of Cash in August 2004 FOOTSTAR INC: August 2004 Net Loss Narrows to $4.1 Million INTERSTATE BAKERIES: Reports $1.6 Mil. in Total Assets at March 6 LIBERATE TECHNOLOGIES: Posts $3.1 Million Net Loss in August 2004 PARMALAT: Farmland Dairies Operating Report Ended August 21, 2004 PARMALAT: Milk Products Operating Report Ended August 21, 2004 PARMALAT USA: Releases Operating Report Ended August 21, 2004 PG&E NATIONAL: ET Gas' Revised May 2004 Monthly Operating Report PG&E NATIONAL: ET Gas' July 2004 Monthly Operating Report PG&E NATIONAL: ET Investments' July 2004 Monthly Operating Report PG&E NATIONAL: ET Holdings' July 2004 Monthly Operating Report RELIANCE GROUP: RIC Liquidator's 2nd Quarter Status Report TOUCH AMERICA: Releases June 2004 Monthly Operating Report WORLD ACCESS: Releases July 2004 Monthly Operating Report ********* AMES DEPARTMENT: July 2004 Monthly Operating Report --------------------------------------------------- Ames Department Stores, Inc., and Subsidiaries Unaudited Consolidated Condensed Balance Sheets At July 31, 2004 (In Thousands) ASSETS Current Assets: Cash and cash equivalents $1,232 Restricted cash 59,669 Receivables 1,131 ---------- Total current assets 62,032 ---------- Fixed assets - ---------- Total assets $62,032 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable: Trade $60,824 Other 13,435 ---------- Total accounts payable 74,259 Self-insurance reserves 32,729 Accrued expenses 24,234 Liabilities subject to compromise 848,280 ---------- Total liabilities 979,502 Stockholders' equity (deficit) Common stock 295 Additional paid-in capital 533,393 Accumulated deficit (1,450,236) Treasury stock (922) ---------- Total stockholders' deficit (914,740) ---------- Total liabilities and stockholders' deficit $62,032 ========== Ames Department Stores, Inc., and Subsidiaries Unaudited Consolidated Condensed Statements of Operations For Four Weeks Ended July 31, 2004 (In Thousands) Total revenue $3,302 Costs and expenses Wind down expenses and other costs 9,530 Write off excess reserves (3,634) Professional fees 150 ---------- Income before income taxes (2,744) ---------- Net Income ($2,744) ========== Ames Department Stores, Inc., and Subsidiaries Unaudited Consolidated Condensed Statements of Cash Flows For Four Weeks Ended July 31, 2004 (In Thousands) Cash flows from operating activities: Net income ($2,744) Expenses not requiring the outlay of cash: Gain on sale of fixed assets - ---------- Cash used by operations (2,744) Changes in working capital: Decrease in receivables 173 Decrease in accounts payable (3,329) Increase in accrued expenses & other liabilities 8,334 Increase in restricted cash (511) ---------- Net cash provided by operating activities 1,923 Cash flows from financing activities: Proceeds from the sale of fixed assets - Borrowings under DIP Credit Agreement - Change in liabilities subject to compromise (2,972) ---------- Net cash provided by financing activities (2,972) Decrease in cash and cash equivalents (1,049) Cash and cash equivalents, beginning of period 2,281 ---------- Cash and cash equivalents, end of period $1,232 ========== As of July 31, 2004, the Debtors have settled approximately 900 trade vendor and landlord claims for approximately $5.5 million, and 9,300 former employee claims for approximately $5.4 million. AMES DEPARTMENT: August 2004 Monthly Operating Report ----------------------------------------------------- Ames Department Stores, Inc., and Subsidiaries Unaudited Consolidated Condensed Balance Sheets At August 28, 2004 (In Thousands) ASSETS Current Assets: Cash and cash equivalents $863 Restricted cash 59,671 Receivables 727 ---------- Total current assets 61,261 ---------- Fixed assets - ---------- Total assets $61,261 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable: Trade $60,527 Other 13,480 ---------- Total accounts payable 74,007 Self-insurance reserves 32,180 Accrued expenses 23,995 Liabilities subject to compromise 848,619 ---------- Total liabilities 978,801 Stockholders' equity (deficit) Common stock 295 Additional paid-in capital 533,393 Accumulated deficit (1,450,306) Treasury stock (922) ---------- Total stockholders' deficit (917,540) ---------- Total liabilities and stockholders' deficit $61,261 ========== Ames Department Stores, Inc., and Subsidiaries Unaudited Consolidated Condensed Statements of Operations For Four Weeks Ended August 28, 2004 (In Thousands) Total revenue $439 Costs and expenses Wind down expenses and other costs 359 Write off excess reserves - Professional fees 150 ---------- Income before income taxes (70) ---------- Net Loss ($70) ========== Ames Department Stores, Inc., and Subsidiaries Unaudited Consolidated Condensed Statements of Cash Flows For Four Weeks Ended August 28, 2004 (In Thousands) Cash flows from operating activities: Net loss ($70) Expenses not requiring the outlay of cash: Gain on sale of fixed assets - ---------- Cash used by operations (70) Changes in working capital: Decrease in receivables 404 Decrease in accounts payable (252) Increase in accrued expenses & other liabilities (788) Increase in restricted cash (2) ---------- Net cash provided by operating activities (708) Cash flows from financing activities: Proceeds from the sale of fixed assets - Borrowings under DIP Credit Agreement - Change in liabilities subject to compromise 339 ---------- Net cash provided by financing activities 339 Decrease in cash and cash equivalents (369) Cash and cash equivalents, beginning of period 1,232 ---------- Cash and cash equivalents, end of period $863 ========== As of August 28, 2004, the Debtors have three properties remaining to be disposed. From August 2002 through fiscal August 2004, the Debtors rejected, through the Bankruptcy Court, leases for real property related to 247 store locations. The principal balance of the General Electric Capital Corporation DIP Facility had been paid down and the Debtors have provided GECC $40 million to cash collateralize the Debtors' outstanding letters of credit. Furthermore, $17.4 million had been placed in escrow. As of August 28, 2004, the Debtors have no borrowings outstanding under the DIP Credit Agreement, as amended. The Debtors have settled approximately 920 trade vendors and landlord claims for approximately $5.6 million, and 9,300 former employee claims for $5.5 million. AVADO BRANDS: Posts $4.3 Million Net Loss in August 2004 -------------------------------------------------------- Avado Brands, Inc., the owner and operator of the Don Pablo's and Hops restaurant chains, delivered its August 2004 Monthly Operating Report to the U.S. Bankruptcy Court on September 16, 2004. For the period ended August 22, 2004, Don Pablo's reports $717,000 of net income, Hops reports a net loss of $2,916,000 and $2,116,000 of net losses at the corporate level resulted in a consolidated net loss of $4,315,000. A full-text copy of Avado Brands, Inc.'s Monthly Operating Report is available at no charge at: http://www.sec.gov/Archives/edgar/data/849101/000084910104000029/moraug.txt On February, 4, 2004, Avado Brands, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas. The Honorable Chief Judge Steven A. Felsenthal presides over the case, which is administered as Case No. 04-31555. Deborah D. Williamson, Esq., and Thomas Rice, Esq., at Cox & Smith Incorporated represent the Debtors in their restructuring efforts. Miller Buckfire Lewis Ying & Co., LLC is providing financial advisory services. DDJ Capital is Avado's DIP lender. DIVINE INC: Releases June to August 2004 Monthly Operating Reports ------------------------------------------------------------------ On July 20, 2004, divine, inc., (n/k/a Enivid, Inc.), released its monthly operating reports for the months June 2004, July 2004, and August 2004. divine provides separate reports for its software, hosting, and corporate businesses. The Company also filed monthly operating reports summarizing its disbursements and receipts for the same period. divine's Software and Hosting business units' operating reports show virtually no activity in June, July, August 2004, because these units were sold in May 2003. divine, inc.'s balance sheet shows: June 30, 2004 July 31, 2004 August 31, 2004 ------------- --------------- --------------- Total Current Assets $61,005,310.05 $59,485,917.67 $58,217,147.29 Total Assets 61,620,941.05 60,101,548.67 58,832,778.29 Postpetition Liabilities 2,099,063.23 2,239,488.28 3,106,788.42 Total Prepetition Liabilities 25,939,512.00 25,939,512.00 25,939,512.00 Total Liabilities 28,038,575.23 28,179,000.28 29,046,300.42 Net Loss $(1,991,514.00) $ (1,659,817.00) $(2,121,150.00) Full-text copies of the Debtor's Monthly Operating Reports are available at no charge at: June 2004 Monthly Operating Reports: Corporate: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d3.htm Software Unit: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d1.htm Hosting Unit: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d2.htm July 2004 Monthly Operating Reports: Corporate: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d7.htm Software Unit: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d5.htm Hosting Unit: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d6.htm August 2004 Monthly Operating Reports: Corporate: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d11.htm Software Unit: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d9.htm Hosting Unit: http://www.sec.gov/Archives/edgar/data/1097516/000110465904027912/a04-10339_1ex99d10.htm divine, Inc., an affiliate of RoweCom Inc., described itself as an extended enterprise company, which serves to make the most of customer, employee, partner, and market interactions, and through a holistic blend of Technology, services, and hosting solutions, assist its clients in extending their enterprise. The Company filed for chapter 11 protection on February 25, 2003 (Bankr. Mass. Case No. 03-11472). Richard E. Mikels, Esq., Kevin J. Walsh, Esq., Adrienne K. Walker, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo and J. Douglas Bacon, Esq., Stephen R. Tetro, Esq., and Adam R. Skilken, Esq., represent the Debtors in their chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $271,372,593 in total assets and $191,957,065 in total debts. ENRON CORP: Releases April 2004 Monthly Operating Report -------------------------------------------------------- On September 13, 2004, Enron Corp. and certain other debtor-in-possession subsidiaries of the Company filed their monthly operating report for April 2004 with the United States Bankruptcy Court for the Southern District of New York. A full-text copy of Enron Corp.'s April 2004 Operating Report is available at: http://www.sec.gov/Archives/edgar/data/1024401/000095012904007090/h18462exv99w1.txt Enron Corp. et al. Cash Activity Rollforward For the Month Ended April 30, 2004 Beginning cash $1,710,000,000 Third party receipts 419,000,000 Third party disbursements (123,000,000) Net Intercompany 102,000,000 Transfer from or to Restricted Cash (231,000,000) --------------- Ending balance $1,877,000,000 Enron Corp. et al. Tax Rollforward (Non-Payroll) For the Month Ended April 30, 2004 Beginning Balance $24,000,000 Accruals (13,000,000) Intercompany 10,000,000 Payments - --------------- Ending Balance $21,000,000 Enron Corp. et al. Receivables Rollforward - Non-Commodity For the Month Ended April 30, 2004 Beginning Balance $296,000,000 Billings 2,000,000 Payments Received (10,000,000) Other Adjustments - --------------- Ending Balance $288,000,000 Enron Corp. et al. Commodity Receivables and Payables For the Month Ended April 30, 2004 Receivables $147,000,000 Payables 648,000,000 Headquartered in Houston, Texas, Enron Corporation is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. The Company filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 125; Bankruptcy Creditors' Service, Inc., 15/945-7000) FAO INC: Reports Sitting on $38.9 Million of Cash in August 2004 ---------------------------------------------------------------- In August 2004, FAO Inc. (n/k/a Children's Books & Toys, Inc.), reports sitting on $38,956,855 of cash. Jerry A. Kollar, Senior Vice President - Finance, reiterates its earlier stated position that it does not expect any recovery to be available to its common stockholders in connection with its bankruptcy. A full-text copy of FAO Inc.'s and its subsidiaries' August 2004 Monthly Operating Report is available at no charge at: http://www.sec.gov/Archives/edgar/data/878720/000110465904027966/a04-10610_1ex99d1.htm FAO Inc. (n/k/a Children's Books & Toys, Inc.) and its wholly- owned subsidiaries ZB Company, Inc., FAO Schwarz, Inc. (n/k/a Toy Soldier, Inc.), The Right Start, Inc. (n/k/a TRS Liquidation Co.), and Targoff-RS, LLC, filed on December 4, 2003 voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (Case No. 03-13672). FOOTSTAR INC: August 2004 Net Loss Narrows to $4.1 Million ---------------------------------------------------------- On September 16, 2004, Footstar, Inc. and its debtor-affiliates filed with the U.S. Bankruptcy Court their monthly operating report for the month of August 2004. The Debtors report a net loss of $4.1 million in $61.7 million of net sales for August 2004. At August 28, 2004, Footstar, Inc.'s consolidated balance sheet shows: Total Current Assets 297,200,000 Total Assets $ 384,700,000 Current Liabilities 113,100,000 Total Liabilities Subject to Compromise 177,100,000 Shareholders' Equity $ 35,000,000 A full-text copy of Footstar, Inc.'s August 2004 Monthly Operating Report is available at no charge at: http://www.sec.gov/Archives/edgar/data/1011308/000090951804000778/jd9-16ex99_1.txt On March 2, 2004, Footstar, Inc. and substantially all of its subsidiaries filed voluntary petitions under Chapter 11 of title 11, United States Code in the United States Bankruptcy Court for the Southern District of New York (Case No. 04-22350). The Debtors remain in possession of their assets and properties, and continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. INTERSTATE BAKERIES: Reports $1.6 Mil. in Total Assets at March 6 ----------------------------------------------------------------- Interstate Bakeries Corporation Unaudited Consolidated Balance Sheets At March 6, 2004 (In thousands) Assets Current assets: Accounts receivable $180,038 Inventories 71,576 Other current assets 79,890 ----------- Total current assets 331,504 Property and equipment: Land and buildings 450,399 Machinery and equipment 1,099,482 ----------- 1,549,881 Less accumulated depreciation (734,225) ----------- Net property and equipment 815,656 Goodwill 215,346 Other intangible assets 190,875 Other assets 43,970 ----------- Total Assets $1,597,351 =========== Liabilities and Stockholders' Equity Current liabilities: Long-term debt payable within one year $62,347 Accounts payable 116,428 Accrued expenses 243,405 ----------- Total current liabilities 422,180 Long-term debt 477,675 Other liabilities 364,070 ----------- Total long-term liabilities 841,745 Stockholders' equity: Preferred stock, par value $0.01 per share; authorized - 1,000,000 shares; issued - none - Common stock, par value $0.01 per share; authorized - 120,000,000 shares; issued - 81,579,000 shares 816 Additional paid-in capital 586,595 Retained earnings 445,576 Treasury stock, at cost (678,911) Treasury stock held in rabbi trust, at cost - Unearned restricted stock compensation (7,602) Accumulated other comprehensive loss (13,048) ----------- Total stockholders' equity 333,426 ----------- Total Liabilities and Stockholders' Equity $1,597,351 =========== Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 in total debts (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004). LIBERATE TECHNOLOGIES: Posts $3.1 Million Net Loss in August 2004 ----------------------------------------------------------------- On September 20, 2004, Liberate Technologies filed its monthly operating report for the month of August 2004 with the United States Bankruptcy Court for the Northern District of California in connection with Liberate's voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code (Case No. 04-31394). The Company reports a net loss of $3,118,385 on $785,754 of net sales in August 2004. At August 31, 2004, Liberate Technologies' balance sheet shows: Total Current Assets $ 214,746,926 Total Assets 223,558,942 Total Current Liabilities 10,377,582 Total Pre-petition Liabilities 19,578,240 Total Liabilities 29,955,822 Total Equity $ 193,603,120 A full-text copy of Liberate Technologies' August 2004 Monthly Operating Report is available at no charge at: http://www.sec.gov/Archives/edgar/data/1085776/000110465904028156/a04-10768_1ex99d01.htm Headquartered in San Mateo, California, Liberate Technologies provides software and services for digital cable systems. The Company filed for chapter 11 protection on April 30, 2004 (Bankr. D. Del. Case No. 04-11299). Daniel J. DeFranceschi, Esq. at Richards, Layton & Finger represents the Debtor in its chapter 11 case. When the Company filed for bankruptcy protection, it listed $257,000,000 in total assets and more than $21,700,000 in total debts. PARMALAT: Farmland Dairies Operating Report Ended August 21, 2004 ----------------------------------------------------------------- Farmland Dairies, LLC Balance Sheet As of August 21, 2004 Assets Cash & Cash Equivalents $13,998,799 Accounts Receivable-Trade 40,879,094 Accounts Rec.-Securitization (42,568,000) Notes Receivable 262,909 Inventory 16,034,138 Prepaid Expenses 15,159,832 Other Current Assets 844,858 -------------- Total Current Assets 44,611,630 Fixed Assets 210,179,290 Accumulated Depreciation 114,899,180 -------------- Net Fixed Assets 95,280,110 Other Assets 44,021,378 Intercompany Receivables 82,156,782 -------------- Total Assets $266,069,900 ============== Liabilities Subject to Compromise: Accounts Payable 14,535,755 Accrued Expenses 3,328,328 Intercompany Payables 25,318,781 Capital Lease 95,000,000 -------------- Total Liabilities Subject to Compromise 138,182,864 Liabilities: Notes & Loans Payable 0 Capital Leases - Short Term 0 Accounts Payable 16,861,001 Accrued Expenses 24,507,057 -------------- Total Current Liabilities 41,368,058 Notes & Loans Payable 30,089,830 Capital Leases - Long Term 45,274 Other 8,389,235 -------------- Total Long Term Liabilities 38,524,339 Intercompany Payables (82,068,989) -------------- Total Liabilities 136,006,272 Equity Paid In Capital 161,506,590 Accum Comprehensive Income (7,013,988) Retained Earnings 11,323,693 YTD Net Income/(Loss) (35,752,667) -------------- Total Equity 130,063,628 -------------- Total Liabilities & Owners' Equity $266,069,900 ============== Farmland Dairies, LLC Income Statement From July 25, 2004 to August 21, 2004 Revenues Gross sales $34,293,126 Less: Returns & discounts 790,970 -------------- Net sales 33,502,156 Expenses Raw Materials & Ingredients 22,113,567 Packaging 2,423,813 Direct Labor 761,287 Power 487,096 Freight 381,013 Distribution 2,475,704 Industrial Depreciation 399,108 Production Overhead 2,179,936 Warehouse (Cooler) 1,491,797 Marketing Costs 681,075 Sales Admin Expenses 414,093 General Expenses 927,322 Financial Costs 820,459 Goodwill/trademarks 6,757 Extraordinary 65,383 Corporate Allocation 275,000 Provision for Income Taxes 0 -------------- Total Expenses 35,903,410 Reorganization Expenses 332,989 -------------- Net Profit (Loss) ($2,068,265) ============== Farmland Dairies, LLC Cash Receipts and Disbursements From July 25, 2004 to August 21, 2004 Cash - Beginning of Month $6,667,837 Receipts From Operations Cash Sales 0 Collection of Accounts Receivable Prepetition 953,259 Postpetition 36,761,638 -------------- Total Operating Receipts 37,714,896 Non - Operating Receipts Proceeds from GE Capital (400,000) Voided Checks (Prepetition) - Adjustments (30,869) Deposits -- Other 4,052,527 Transfers 3,350,000 -------------- Total Non-Operating Receipts 6,971,657 -------------- Total Receipts 44,686,553 -------------- Total Cash Available 51,354,390 Operating Disbursements Chemicals 319,189 Commissions 109,763 Consulting/Legal 57,557 Co-packing 566,333 Employee & Employee-related expenses 858,256 Equipment Leases 385,141 Freight & Postage 249,038 Fuel 99,086 Transportation 448,322 Ingredients 1,496,751 Insurance 1,331,288 Lab Fees 44,103 Licenses & Taxes 74,073 Marketing 18,046 Other 583,540 Packaging 2,330,071 Pallets/Cases/Bossies 258,209 Milk Producers 16,448,554 Marketing Administrator 221,615 Purchased Products 714,602 R & M, Parts, Supplies 844,506 Raw Milk 1,139,796 Rebates 48,425 Rent 65,919 Security 104,194 Temporary Labor 74,225 Travel & Entertainment 25,908 Utilities 1,000,130 Securitization Payments 2,283,236 Payroll 3,586,163 Payroll Taxes 390,030 Voided Checks (Postpetition) (193,670) -------------- Total expenses 35,982,399 Reorganization Expenses Professional Fees 1,190,965 U.S. Trustee Fees 20,250 DIP Interest & Fees 161,977 -------------- Total Reorganization Expenses 1,373,192 -------------- Total Disbursements 37,355,591 -------------- Net Cash Flow 7,330,962 -------------- Cash - End of Month $13,998,799 ============== PARMALAT: Milk Products Operating Report Ended August 21, 2004 -------------------------------------------------------------- Milk Products of Alabama, LLC Balance Sheet As of August 21, 2004 Assets Cash & Cash Equivalents $2,300,010 Accounts Receivable-Net 3,290,918 Inventory 1,167,551 Prepaid Expenses 272,968 Other Current Assets 4,521 -------------- Total Current Assets 7,035,968 Fixed Assets 10,926,223 Accumulated Depreciation 6,692,669 -------------- Net Fixed Assets 4,233,554 Other Assets 885,023 Intercompany Receivables 0 -------------- Total Assets $12,154,545 ============== Liabilities Subject to Compromise Accrued Expenses $45,227 Intercompany payables 8,338,493 -------------- Total Liabilities Subject to Compromise 8,383,720 Liabilities Accounts Payable 187,037 Accrued Expenses 193,439 -------------- Total Current Liabilities 380,476 Long Term Notes Payable -- Intercompany - Other 293,096 -------------- Total Long Term Liabilities 293,096 Intercompany Payables 3,314,109 -------------- Total Liabilities 12,371,401 Equity Retained Earnings - YTD Net Income/(Loss) (235,270) -------------- Total Equity (216,856) -------------- Total Liabilities & Owners' Equity $12,154,545 ============== Milk Products of Alabama, LLC Income Statement From July 25, 2004 to August 21, 2004 Revenues Gross sales $4,362,610 Less: Returns & discounts 2,353 -------------- Net sales 4,360,257 Expenses Raw Materials & Ingredients 3,038,845 Packaging 366,403 Direct Labor 93,872 Power 80,518 Freight 160,899 Industrial Depreciation 30,093 Production Overhead 163,227 Warehouse (Cooler) 10,187 Marketing Costs 0 Sales Admin Expenses 21,083 Financial Costs 21,880 Other (Income) Expense (422) Extraordinary (236,612) Corporate Allocation (275,000) Income Taxes 0 -------------- Total Expenses 3,536,460 Reorganization Expenses Professional Fees - U.S. Trustee Fees 1,770,246 Other - -------------- Total Reorganization Expenses - -------------- Net Profit (Loss) ($946,449) ============== Milk Products of Alabama, LLC Cash Receipts and Disbursements From July 25, 2004 to August 21, 2004 Cash - Beginning of Month $0 Receipts From Operations Cash Sales - Collection of Accounts Receivable Prepetition 0 Postpetition 5,146,412 -------------- Total Operating Receipts 5,146,412 Non - Operating Receipts Transfers (3,350,000) Other 2,586 -------------- Total Non-Operating Receipts (3,347,414) -------------- Total Receipts 1,798,998 -------------- Total Cash Available 2,301,638 Operating Disbursements Bank Charges - Freight - Ingredients - Licenses & Taxes - Packaging - Raw Milk - R & M, Parts, Supplies - Other - Warehouse (Cooler) - Marketing Costs - Sales Admin Expenses - General Expenses - Financial Costs - Goodwill/trademarks - Extraordinary - Corporate Allocation - Income Taxes - -------------- Total expenses 1,628 Reorganization Expenses Professional Fees - U.S. Trustee Fees - Other - -------------- Total Reorganization Expenses - -------------- Total Disbursements 1,628 -------------- Net Cash Flow 1,797,370 -------------- Cash - End of Month $2,300,010 ============== PARMALAT USA: Releases Operating Report Ended August 21, 2004 ------------------------------------------------------------- Parmalat USA Corporation Balance Sheet As of August 21, 2004 Assets Cash & Cash Equivalents $0 Accounts Receivable-Net 0 Notes Receivable -Current 0 Inventory 0 Prepaid Expenses 0 Other Current Assets 0 -------------- Total Current Assets 0 Fixed Assets 0 Accumulated Depreciation 0 -------------- Net Fixed Assets 0 Other Assets 326,267,456 Intercompany Receivables 24,965,787 -------------- Total Assets $351,233,243 ============== Liabilities Subject to Compromise Long Term Debt & Interest $19,836,909 Intercompany payables 212,783,632 -------------- Total Liabilities Subject to Compromise 232,620,541 Liabilities Accounts Payable 0 Notes & Loans Payable 0 Accrued Expenses 648,977 Intercompany Payables 0 -------------- Total Liabilities 233,269,518 Equity Common Stock 1,388,356 Paid In Capital 227,962,103 Retained Earnings (110,643,290) YTD Net Income/(Loss) (743,444) -------------- Total Equity 117,963,725 -------------- Total Liabilities & Owners' Equity $351,233,243 ============== Parmalat USA Corporation Income Statement From July 25, 2004 to August 21, 2004 Revenues Gross sales $0 Less: Returns & discounts 0 -------------- Net sales 0 Expenses Raw Materials & Ingredients 0 Packaging 0 Direct Labor 0 Power 0 Freight 0 Distribution 0 Industrial Depreciation 0 Production Overhead 0 Warehouse (Cooler) 0 Marketing Costs 0 Sales Admin Expenses 0 General Expenses 0 Financial Costs 79,603 Goodwill/trademarks 18,226 Extraordinary - Corporate Allocation - Depreciation - Amortization - Income Taxes - -------------- Total Expenses 97,829 Reorganization Expenses Professional Fees - U.S. Trustee Fees 250 Other - -------------- Total Reorganization Expenses 250 -------------- Net Profit (Loss) ($98,079) ============== Parmalat USA Corporation received no cash nor made disbursements from July 25, 2004, to August 21, 2004. PG&E NATIONAL: ET Gas' Revised May 2004 Monthly Operating Report ---------------------------------------------------------------- NEGT Energy Trading-Gas Corporation revised its Monthly Operating Report for May 2004. NEGT Energy Trading-Gas Corporation Unaudited Balance Sheet As of May 31, 2004 ASSETS Current Assets Cash $10,465,079 Accounts Receivable-Trade 37,104,637 Valuation from Unrealized Commodity Contracts Undetermined Receivables from Officers/Employees/Affiliates Undetermined Notes Receivable Stocks 0 Inventory 0 Other Current Assets Deposits 70,075,017 Prepayments 10,036,500 Other Current Assets 3,113,514 -------------- Total Current Assets Undetermined Fixed Assets Land 0 Building 0 Equipment, Furniture & Fixtures 21,635,393 Less Accumulated Depreciation (20,434,680) -------------- Total Fixed Assets $1,000,713 Other Assets Accrued taxes Undetermined -------------- Total Other Assets Undetermined -------------- TOTAL ASSETS Undetermined ============== LIABILITIES AND EQUITY Postpetition Liabilities Accounts Payable $0 Accrued Quarterly Fees 250 Notes Payable 0 Rent and Leases Payable 0 Taxes Payable 0 Accrued Interest 0 Other: Accrued Legal fees 0 Accrued Payroll and Benefits 17,413 -------------- Total Postpetition Liabilities 17,663 Prepetition Liabilities Priority Claims Undetermined Secured Debts Undetermined Unsecured Debts Undetermined -------------- Total Prepetition Liabilities Undetermined Owner's Equity (Deficit) Capital Stock/Owner's Investments - Paid-In Capital Surplus Undetermined Retained Earnings (deficit) Prepetition Undetermined Postpetition Undetermined -------------- Total Owner's Equity Undetermined -------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY Undetermined ============== NEGT Energy Trading-Gas Corporation Unaudited Income Statement For the Period May 1 to May 31, 2004 Total Sales/Income $376,683 COST OF SALES: Purchases of Inventory 0 Purchased Services 0 Other: Purchase of Commodities 2,453,665 -------------- Total Cost of Sales 2,453,665 -------------- Gross Profit (1,716,982) OPERATING EXPENSES: Bad Debt Expense 0 Bank Charges 1,528 Communications 0 Computer Supplies 0 Credit & Commitment Fees 0 Datafeeds 3,420 Fixed Assets Depreciation 204,277 Indirect Allocations 70,149 Insurance 0 Legal Fees 375,000 Recruiting & Relocation 0 Realized(Gain)/Loss on Foreign Exchange (659) Rent 464 Unrealized(Gain)/Loss on Foreign Exchange 0 Office Supplies 0 Other 0 Payroll and benefits (78,080) Professional Fees 7,015 Software Costs 0 Subscriptions 0 Taxes Other than Income 300 Training 0 -------------- Total Operating Expenses 583,414 -------------- Profit/Loss from Operation (2,300,396) Other Income (Expenses): Interest Income 175,874 Interest Expense 0 Equity in Subsidiaries 0 Other Income(Expenses) 0 -------------- Total Other Income (Expenses) 175,874 -------------- Income Before Taxes (2,124,523) Income Taxes Expense (Benefit) Undetermined -------------- NET INCOME Undetermined ============== NEGT Energy Trading-Gas Corporation Cash Reconciliation Report For the Period May 1 to May 31, 2004 Cash balance from prior balance sheet $10,464,421 Pre-tax Net income for month (2,124,523) Income/Expenses Not Requiring Cash: Depreciation 204,277 Unrealized (Gain) Loss on Foreign Exchange 0 Relief of Allowance for Doubtful Accts 0 -------------- Total Expenses Not Requiring Cash 204,277 -------------- Total Cash from Operations 8,544,175 Other sources/uses of cash: Decrease (Incr): Accounts Receivable Non-Affiliate 27,858,506 Accounts Receivable Affiliate 12,032 Inventory 0 Equipment 0 Furniture & Fixtures 0 Prepaids 2,552,388 Deposits 4,500,000 Other Current Assets 0 Increase (Decr): Accounts Payable Non-Affiliate (20,781,481) Accounts Payable Affiliate (1,605,029) Accrued Liabilities (120,654) Current Deferred Liabilities (10,494,859) Accrued Interest 0 Accrued P/R Taxes 0 Accrued Salaries 0 Accrued Sales Tax 0 Note Payable Taxes 0 Tax Liability 0 -------------- Total Other Sources & Uses of Cash 1,920,904 -------------- ENDING CASH BALANCE $10,465,079 ============== PG&E NATIONAL: ET Gas' July 2004 Monthly Operating Report --------------------------------------------------------- NEGT Energy Trading-Gas Corporation Unaudited Balance Sheet As of July 31, 2004 ASSETS Current Assets Cash $10,485,830 Accounts Receivable-Trade 32,762,872 Valuation from Unrealized Commodity Contracts Undetermined Receivables from Officers/Employees/Affiliates Undetermined Notes Receivable Stocks 0 Inventory 0 Other Current Assets Deposits 70,075,017 Prepayments 10,036,500 Other Current Assets 3,113,514 -------------- Total Current Assets Undetermined Fixed Assets Land 0 Building 0 Equipment, Furniture & Fixtures 21,635,393 Less Accumulated Depreciation (20,975,736) -------------- Total Fixed Assets $659,656 Other Assets Accrued taxes Undetermined -------------- Total Other Assets Undetermined -------------- TOTAL ASSETS Undetermined ============== LIABILITIES AND EQUITY Postpetition Liabilities Accounts Payable $0 Accrued Quarterly Fees 250 Notes Payable 0 Rent and Leases Payable 0 Taxes Payable 0 Accrued Interest 0 Other: Accrued Legal fees 0 Accrued Payroll and Benefits 62,589 -------------- Total Postpetition Liabilities $17,663 Prepetition Liabilities Priority Claims Undetermined Secured Debts Undetermined Unsecured Debts Undetermined -------------- Total Prepetition Liabilities Undetermined Owner's Equity (Deficit) Capital Stock/Owner's Investments - Paid-In Capital Surplus Undetermined Retained Earnings (deficit) Prepetition Undetermined Postpetition Undetermined -------------- Total Owner's Equity Undetermined -------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY Undetermined ============== NEGT Energy Trading-Gas Corporation Unaudited Income Statement For the Period July 1 to July 31, 2004 Total Sales/Income ($1,550) COST OF SALES: Purchases of Inventory 0 Purchased Services 0 Other: (Identify) 0 Purchase of Commodities (10,000) -------------- Total Cost of Sales (2,453,665) -------------- Gross Profit (8,450) OPERATING EXPENSES: Bad Debt Expense 0 Bank Charges 467 Communications 52 Computer Supplies 0 Credit & Commitment Fees 0 Datafeeds 0 Fixed Assets Depreciation 136,780 Indirect Allocations 30,249 Insurance 0 Legal Fees 375,000 Recruiting & Relocation 0 Realized(Gain)/Loss on Foreign Exchange (1,215) Rent 3,160 Unrealized(Gain)/Loss on Foreign Exchange 0 Office Supplies 0 Other 5,000 Payroll and benefits 42,720 Professional Fees 5,324 Software Costs 2,475 Subscriptions 0 Taxes Other than Income 0 Training 0 -------------- Total Operating Expenses 600,013 -------------- Profit/Loss from Operation (608,463) Other Income (Expenses): Interest Income 285,416 Interest Expense 0 Equity in Subsidiaries 0 Other Income(Expenses) 0 -------------- Total Other Income (Expenses) 285,416 -------------- Income Before Taxes ($323,046) Income Taxes Expense (Benefit) Undetermined -------------- NET INCOME Undetermined ============== NEGT Energy Trading-Gas Corporation Cash Reconciliation Report For the Period July 1 to July 31, 2004 Cash balance from prior balance sheet $10,466,514 Pre-tax Net income for month (323,046) Income/Expenses Not Requiring Cash: Depreciation 136,780 Unrealized (Gain) Loss on Foreign Exchange 0 Relief of Allowance for Doubtful Accts 0 -------------- Total Expenses Not Requiring Cash 136,780 -------------- Total Cash from Operations 10,280,248 Other sources/uses of cash: Decrease (Incr): Accounts Receivable Non-Affiliate 447,329 Accounts Receivable Affiliate 14,284 Inventory 0 Equipment 0 Furniture & Fixtures 0 Prepaids 0 Deposits 0 Other Current Assets 0 Increase (Decr): Accounts Payable Non-Affiliate (25) Accounts Payable Affiliate (256,005) Accrued Liabilities 0 Current Deferred Liabilities 0 Accrued Interest 0 Accrued P/R Taxes 0 Accrued Salaries 0 Accrued Sales Tax 0 Note Payable Taxes 0 Tax Liability 0 -------------- Total Other Sources & Uses of Cash 205,583 -------------- ENDING CASH BALANCE $10,485,830 ============== PG&E NATIONAL: ET Investments' July 2004 Monthly Operating Report ----------------------------------------------------------------- NEGT ET Investments Corporation Unaudited Balance Sheet As of July 31, 2004 ASSETS Current Assets Cash $0 Accounts Receivable 0 Receivables from Officers/Employees/Affiliates Undetermined Notes Receivable Stocks 0 Inventory 0 Other Current Assets - -------------- Total Current Assets Undetermined Fixed Assets Land 0 Building 0 Equipment, Furniture & Fixtures 0 Less Accumulated Depreciation 0 -------------- Total Fixed Assets $0 Other Assets Investment in Subsidiaries Undetermined -------------- Total Other Assets Undetermined -------------- TOTAL ASSETS Undetermined ============== LIABILITIES AND EQUITY Postpetition Liabilities Accounts Payable $0 Accrued Quarterly Fees 250 Notes Payable 0 Rent and Leases Payable 0 Taxes Payable 0 Accrued Interest 0 Other 0 -------------- Total Postpetition Liabilities $250 Prepetition Liabilities Priority Claims Undetermined Secured Debts Undetermined Unsecured Debts Undetermined -------------- Total Prepetition Liabilities Undetermined Owner's Equity (Deficit) Capital Stock, Owner's Investments Undetermined Paid-In Capital Surplus Undetermined Retained Earnings (deficit) Prepetition Undetermined Postpetition Undetermined -------------- Total Owner's Equity Undetermined -------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY Undetermined ============== NEGT ET Investments Corporation Unaudited Income Statement For the Period July 1 to July 31, 2004 Total Sales/Income $0 COST OF SALES: Purchases of Inventory 0 Purchased Services 0 Other (Identify) 0 -------------- Total Cost of Sales 0 -------------- Gross Profit 0 OPERATING EXPENSES: Bad Debt Expense 0 Officer Salaries - Other Employee Salaries - Taxes (Payroll) - Employee Benefits - Advertising - Auto Expenses - Entertainment - Insurance (Real Estate) - Insurance (Other) - Leases (Other than Rent) - Outside Services & Contractors - Professional Fees (Atty. Acct.) - Rent - Repairs & Maintenance - Supplies - Taxes (Real Property) - Taxes (Other) - Telephone - Travel - Utilities - Other 250 -------------- Total Operating Expenses 250 -------------- Profit/Loss from Operation (250) Other Income (Expenses): Interest Expense (1,574) Equity in ET Power (3,250,512) -------------- Total Other Income (Expenses) (3,252,086) -------------- Income Before Taxes ($3,252,336) Income Taxes Expense (Benefit) Undetermined -------------- NET INCOME Undetermined ============== NEGT ET Investments Corporation Cash Reconciliation Report For the Period July 1 to July 31, 2004 Cash balance from prior balance sheet $0 Pre-tax Net income for month (3,252,336) Expense Not Requiring Cash: Depreciation 0 Other: Investment in Subsidiaries 3,250,512 Relief of Allowance of Doubtful Accounts 0 -------------- Total Expenses Not Requiring Cash 3,250,512 -------------- Total Cash from Operations (1,824) Other sources/uses of cash: Decrease (Incr): Accounts Receivable 0 Inventory 0 Equipment 0 Furniture & Fixtures 0 Increase (Decr): Accounts Payable 0 Accounts Payable - Affiliate 1,824 Accounts Payable - Interest Payable 0 Accrued Interest 0 Accrued P/R Taxes 0 Accrued Professional Fees 0 Accrued Rent 0 Accrued Salaries 0 Accrued Sales Tax 0 Note Payable Taxes 0 Taxes Payable 0 (Less) Unrecorded Bank Service Charges 0 -------------- Total Other Sources & Uses of Cash 1,824 -------------- ENDING CASH BALANCE ($0) ============== PG&E NATIONAL: ET Holdings' July 2004 Monthly Operating Report -------------------------------------------------------------- NEGT Energy Trading Holdings Corporation Unaudited Balance Sheet As of July 31, 2004 ASSETS Current Assets Cash $291,774,454 Accounts Receivable 293,091 Receivables from Officers/Employees/Affiliates Undetermined Notes Receivable Stocks 0 Inventory 0 Other Current Assets Accrued taxes Undetermined -------------- Total Current Assets Undetermined Fixed Assets Land 0 Building 0 Equipment, Furniture & Fixtures 0 Less Accumulated Depreciation 0 Other Fixed Assets 0 -------------- Total Fixed Assets $0 Other Assets Investments in Subsidiaries Undetermined -------------- Total Other Assets Undetermined -------------- TOTAL ASSETS Undetermined ============== LIABILITIES AND EQUITY Postpetition Liabilities Accounts Payable $588,625 Notes Payable 0 Rent and Leases Payable 0 Taxes Payable 0 Accrued Interest 0 Other: Accrued Quarterly Fees 5,000 Accrued Legal Fees 1,976,093 Accrued Payroll and Benefits 184,197 -------------- Total Postpetition Liabilities $2,753,915 Prepetition Liabilities Priority Claims Undetermined Secured Debts Undetermined Unsecured Debts Undetermined -------------- Total Prepetition Liabilities Undetermined Owner's Equity (Deficit) Capital Stock/Owner's Investments Undetermined Paid-In Capital Surplus Undetermined Retained Earnings Prepetition Undetermined Postpetition Undetermined -------------- Total Owner's Equity Undetermined -------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY Undetermined ============== NEGT Energy Trading Holdings Corporation Unaudited Income Statement For the Period July 1 to July 31, 2004 Total Sales/Income $0 COST OF SALES: Purchases of Inventory 0 Purchased Services 0 Other 0 -------------- Total Cost of Sales 0 -------------- Gross Profit 0 OPERATING EXPENSES: Bad Debt Expense 0 Communications (21) Computer Supplies 0 Credit/Commitment Fees 54,625 Datafeeds 0 Indirect Allocations (302,154) Insurance 0 Legal Fees 375,000 Misc. Tax Payments 0 Office Supplies 0 Other 0 Other Business Expenses 0 Payroll and benefits (109,340) Postage & Delivery 0 Professional Fees 6,507 Recruiting & Relocation 0 Rent 3,863 Software Costs 4,150 Subscriptions 0 Training 0 Travel 0 US Trustees 5,000 -------------- Total Operating Expenses 37,681 -------------- Profit/Loss from Operation (37,681) Other Income (Expenses): Interest Income 294,168 Interest Expense (308,688) Equity in Subsidiary: Investment in ET Power (66,337) Investment in ET Investment (1,966,036) Investment in ET Gas Corp. (195,281) Investment in NEGT International 19,967 -------------- Total Other Income (Expenses) (2,222,206) -------------- Income Before Taxes ($2,259,887) Income Taxes Expense (Benefit) Undetermined -------------- NET INCOME Undetermined ============== NEGT Energy Trading Holdings Corporation Cash Reconciliation Report For the Period July 1 to July 31, 2004 Cash balance from prior balance sheet $289,494,834 Pre-tax Net income for month (2,259,887) Expense Not Requiring Cash: Depreciation 0 Investment in ET Power 66,337 Investment in ET Investment 1,966,036 Investment in ET Gas Corp. 195,281 Investment in NEGT International (19,967) Relief of Allowance of Doubtful Accounts 0 -------------- Total Expenses Not Requiring Cash 2,207,687 -------------- Total Cash from Operations 289,442,634 Other sources/uses of cash: Decrease (Incr): Accounts Receivable Non-Affiliate (55,913) Accounts Receivable Affiliate 2,761,046 Inventory 0 Equipment 0 Furniture & Fixtures 0 Prepaids 4,150 Increase (Decr): Accounts Payable - Non-Affiliate (210,588) Accounts Payable - Affiliate (168,142) Accrued Liabilities (183,432) Accrued Interest 0 Accrued P/R Taxes 0 Accrued Professional Fees 184,583 Accrued Salaries 0 Accrued Sales Tax 0 Note Payable Taxes 0 Tax Liability 0 (Less) Unrecorded Bank Service Charges 0 -------------- Total Other Sources & Uses of Cash 2,331,705 -------------- ENDING CASH BALANCE $291,774,339 ============== RELIANCE GROUP: RIC Liquidator's 2nd Quarter Status Report ---------------------------------------------------------- M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, issues a Status Report on the Liquidation of Reliance Insurance Company for the Second Quarter 2004. In her capacity as RIC Liquidator, Ms. Koken reports that, at the end of the first quarter 2004, the Company held $5,800,000,000 in assets. The most significant balance was $3,600,000,000, relating to reinsurance receivables and future reinsurance recoverables. This figure was reduced from a $3,700,000,000 estimate in the First Quarter Report. Total liabilities are estimated at $8,800,000,000, with the most significant balance, $5,400,000,000 attributable to loss and loss adjustment expenses on direct business. The Statement reflects $1,300,000,000 in losses and loss adjustment expenses paid by Guaranty Associations. This figure includes data reported to the estate through an automated interface on a time lag basis. Since not all states were reporting through this system at the end of the quarter, actual payments by GAs are higher. This value includes $1,300,000,000 in losses and loss adjustment expenses on assumed reinsurance business, which are Class C general creditor claims. The net deficit produced is $2,991,800,000. Short and intermediate duration marketable investments increased from $464,300,000 to $545,100,000 at the end of the period. Reinsurance collections, the primary source of funds, totaled $115,600,000. The estate paid $28,300,000 in early access payments to the GAs. Loss adjustment expenses were $1,700,000. Operating expenses were $57,200,000, which includes GA reimbursed expenses of $21,600,000. At March 31, 2004, RIC held Symbol Technologies common stock worth $136,400,000. On July 30, 2004, the market value was $13.09 per share. RIC will continue to sell shares as appropriate, depending on market conditions. RIC estimates current and future premium receivables at $146,400,000. This includes receivables arising from large deductible policies billed in 2003, whose ownership is disputed. At March 31, 2004, reinsurance receivables and recoverables total $3,600,000,000, down $100,000,000. RIC holds about $1,200,000,000 in collateral as security. Total reinsurance collections in the first quarter of 2004 amounted to $115,600,000, with total collections since the date of liquidation of $701,800,000. The inventory of billed reinsurance receivables is $824,400,000 as of March 31, 2004. Of this amount, approximately $266,000,000 relates to pre-liquidation balances. This balance relates to amounts in both formal and informal dispute, amounts available to reinsurers as legitimate offsets and balances due from insolvent and financially distressed companies. Data feeds from the Guaranty Associations providing paid and outstanding claim information were loaded into RIC's systems in April 2003. The GA data plus the Notices of Determination generated about $757,000,000 of post liquidation billings, of which $558,400,000 was unpaid at March 31, 2004. The amount collected will ultimately be much lower due to disputes, offsets and insolvencies. RIC is aggressively attempting to collect reinsurance billings and is in constant contact with its major reinsurers. Formal dispute resolution actions continue against several of the reinsurers with substantial overdue balances, including John Hancock Life Insurance Company and various Underwriters at Lloyd's. RIC expects these disputes to be resolved within the next six to twelve months. A federal district court ruled in favor of RIC on a $6,600,000 portion of a recent arbitration award. However, the reinsurer has appealed the ruling to the Third Circuit Court of Appeals. During 2004, RIC completed 13 on-site reinsurance audits at various GAs. Ms. Koken advises that reinsurer financial strength is a problem and will continue to be a major concern for the duration of the RIC liquidation proceedings. RIC is monitoring the financial condition of its major reinsurers and will attempt to settle its overall exposure with distressed companies through commutation. However, significant write-offs for uncollectible reinsurance are expected, Ms. Koken says. At June 30, 2004, RIC had a total of 395 employees in both the Philadelphia and New York City offices. Since January 2004, staff has been reduced in most areas with a net decrease of 37 employees. CTG, a professional Information Technology consulting company, and RCG Information Technology, a professional IT consulting company owned by RIC, have provided all RIC's IT services. As of July 30, 2004, the IT services contract with CTG was terminated and all CTG employees and consultants working for RIC became employees and consultants of RCG. The Liquidator has devoted considerable resources to general asset recovery, through numerous plaintiff actions to recover assets owed to the estate. These include litigation and arbitration for: (1) collections from agencies, TPAs, brokers or program managers -- approximately $27,000,000 sought; (2) claims in bankruptcy against financially distressed insureds -- approximately $120,000,000 sought; (3) subrogation matters -- approximately $30,000,000 sought; (4) premium and large deductible collections -- approximately $27,000,000 sought; (5) reinsurance recoveries -- approximately $175,000,000 sought; and (6) other litigation -- approximately $9,000,000 sought. During the first six months of 2004, the Liquidator recovered more than $46,200,000 through legal actions. Through June 30, 2004, RIC received 157,153 proofs of claim, of which 2,955 were filed after the deadline. The number of POCs declined slightly from the first quarter because a number of duplicate POCs were identified and inactivated. RIC mailed 158,290 status letters and issued 37,264 Notices of Determination. Some POCs have received more than one status letter as the evaluation of their claim progressed. Through June 30, 2004, the Liquidator has allowed $209,000,000 for all NODs issued. The Liquidator has received 289 objections to the NODs. Of those objections, 22 have been resolved and 267 are in the objection resolution process. Referees have been assigned to 175 objections. The Liquidator has established a process to review requests for the release of collateral held to secure obligations for direct insureds, reinsurers and premium receivables. As of June 30, 2004, RIC held collateral of approximately $2,200,000,000 to secure current and future obligations. For the six months ended June 30, 2004, 103 accounts were reviewed, resulting in the release of $67,700,000 in collateral for 67 accounts, denials issued for 9 accounts, and other resolutions for 27 accounts. Reliance Insurance Company (In Liquidation) Special Purpose Balance Sheet At March 31, 2004 Assets Short-term Investments $545,100,000 Symbol Technologies Common Stock 136,400,000 Non-liquid Investments 19,900,000 Investments in Trust - Secured Creditors 303,500,000 Real Estate Investments 27,500,000 --------------- Invested Assets 1,032,400,000 Investments in Affiliates 129,000,000 --------------- Total Invested Assets 1,161,400,000 Premium Balances 146,400,000 Reinsurance Receivable 824,400,000 Reinsurance Recoverable 2,798,700,000 Early Access to Guaranty Associations 806,900,000 Other Assets 51,200,000 --------------- Total Assets $5,789,000,000 =============== Liabilities Loss & Loss Adjustment Expenses - GAs 1,266,200,000 Loss & Loss Adjustment Expenses - Direct 5,388,500,000 Loss & Loss Adjustment Expenses - Assumed 1,287,500,000 Funds Held 444,500,000 Other Liabilities 394,000,000 --------------- Total Liabilities 8,780,800,000 --------------- Net Deficit ($2,991,800,000) =============== Reliance Insurance Company (In Liquidation) Statement of Cash Flow January 1, 2004 to March 31, 2004 Beginning Balance $464,300,000 Sources: Reinsurance Collections 115,600,000 Premium Collections 7,700,000 Subrogation Recoveries 3,300,000 RGH Settlement 45,300,000 Released From Trust 12,500,000 Symbol Technologies Stock Sales 11,100,000 Investment Appreciation 4,800,000 Other 2,200,000 --------------- Total Sources 203,000,000 --------------- Uses: Early Access to GAs (28,300,000) Loss & Loss Adjustment Expenses (1,700,000) Operating Expenses (57,200,000) Net Checks Cashed But Issued (35,000,000) --------------- Total Uses (122,200,000) --------------- Net Increase in Funds 80,800,000 Ending Balance $545,100,000 =============== Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by the Insurance Commissioner of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) TOUCH AMERICA: Releases June 2004 Monthly Operating Report ---------------------------------------------------------- On June 19, 2003, Touch America Holdings, Inc. and subsidiaries Touch America, Inc., Touch America Intangible Holding Company, LLC, Touch America Purchasing Company, LLC, Entech, LLC, American Fiber Touch, LLC, and Sierra Touch America, LLC, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. These cases are jointly administered under Touch America Holdings, Inc., case number 03-11915. Touch America Holdings, Inc.'s balance sheet shows: June 30, 2004 --------------- Current Assets $684,668,315.04 Total Assets 613,585,052.64 Postpetition Debts 34,247,317.21 Pre-petition Debts 252,752,914.51 Total Liabilities 287,000,231.72 Net Owner's Equity $326,584,820.92 A full-text copy of the Debtors' June 2004 Monthly Operating Reports is available at no charge at: http://www.sec.gov/Archives/edgar/data/1144835/000110465904027918/a04-10647_1ex99df.htm On December 23, 2003, Touch America sold substantially all of its Internet services, private line, and dark fiber assets to 360networks, a Vancouver, Canada based corporation for $28,000,000. On December 23, 2003, Touch America also sold certain dark fiber assets to Qwest Communications, Inc. for $8,000,000. With the exception of certain wireless services, Touch America ceased operations as of February 29, 2004. Touch America had the exclusive right to file a Chapter 11 Liquidating Plan through April 14, 2004, and on that date, filed a motion to extend the exclusivity period for an additional 45 days. On June 7, 2004, an order was entered by the Bankruptcy Court granting the extension of the exclusive right to file a plan until July 12, 2004 and the exclusive right to solicit acceptances thereto until September 10, 2004. On February 25, 2004, an order was entered by the Bankruptcy Court denying a motion of certain shareholders directing the United States Trustee to appoint an Official Committee of Equity Security Holders. It is contemplated that funds will be available for distribution to unsecured creditors, however the estimated amount to be distributed and percentage of recovery to unsecured creditors has not yet been determined. Touch America estimates that the claims of creditors and costs of administration of its bankruptcy will exceed the total amount of funds available to Touch America's bankruptcy estate. WORLD ACCESS: Releases July 2004 Monthly Operating Report --------------------------------------------------------- World Access, Inc., and its WA Telcom Products Co., Inc., World Access Telecommunications Group, Inc., FaciliCom International, L.L.C. and WorldxChange Communications, Inc., subsidiaries released Monthly Operating Reports this week for July 2004. The Companies caution that the information in these reports is unaudited and has not been reviewed by an independent accountant. The Monthly Operating Reports for the month ending July 31, 2004 show: Beginning Cash Ending Cash Debtor Entity Balance Balance ------------- -------------- -------------- World Access, Inc. $12,627,416.24 $12,760,932.64 WA Telcom Products Co., Inc. 10,110,394.12 10,119,389.06 World Access Telecommunications Group, Inc. 7,740,884.61 7,743,384.61 FaciliCom International, L.L.C. 14,427,677.50 16,477,831.22 World ExChange Communications $ 3,295,749.70 $ 3,337,926.62 Full-text copies of the Debtors' July 2004 Monthly Operating Reports are available at no charge at: World Access Inc.: http://www.sec.gov/Archives/edgar/data/1071645/000095014404009273/g91018exv99w1.txt WA Telcom Products Co., Inc.: http://www.sec.gov/Archives/edgar/data/1071645/000095014404009273/g91018exv99w2.txt World Access Telecommunications Group, Inc.: http://www.sec.gov/Archives/edgar/data/1071645/000095014404009273/g91018exv99w3.txt FaciliCom International, L.L.C.: http://www.sec.gov/Archives/edgar/data/1071645/000095014404009273/g91018exv99w4.txt World ExChange Communications: http://www.sec.gov/Archives/edgar/data/1071645/000095014404009273/g91018exv99w5.txt On April 24, 2001, World Access, Inc., doing business as WAXA Inc., focuses on providing bundled voice, data and Internet services to key regions across the globe. The Company and its debtor-affiliates filed for chapter 11 protection in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (Bankr. Case No. 01-14633). ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman, Editors. Copyright 2004. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***