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/raid1/www/Hosts/bankrupt/TCR_Public/070630.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, June 30, 2007, Vol. 11, No. 153 Headlines ADVANCED MARKETING: Files April 2007 Monthly Operating Report CATHOLIC CHURCH: Davenport Files May 2007 Monthly Operating Report CATHOLIC CHURCH: San Diego Files April 2007 Operating Report COLLINS & AIKMAN: Earns $23.8 Million in Period Ended May 15 DELTA WOODSIDE: Files Operating Report for Period Ended May 5 DELTA WOODSIDE: Files Operating Report for Period Ended March 31 DELTA WOODSIDE: Files Operating Report for Period Ended March 3 DELTA WOODSIDE: Files Operating Report for Period Ended February 3 HANCOCK FABRICS: Posts $5.7 Mil. Net Loss in Period Ended June 2 HANCOCK FABRICS: HancockFabrics.com Files Schedules HANCOCK FABRICS: HF Enterprise Files Schedules of Assets & Debts HANCOCK FABRICS: Hancock Fabrics LLC Files Schedules HANCOCK FABRICS: HF Merchandising Files Schedules HANCOCK FABRICS: Hancock Fabrics of MI Files Schedules HANCOCK FABRICS: HF Resources Files Schedules of Assets & Debts MORTGAGE LENDERS: Posts $7.9 Million Net Loss in May 2007 MORTGAGE LENDERS: Posts $136 Million Net Loss in April 2007 MUSICLAND HOLDING: Posts $138,000 Net Loss in May 2007 MUSICLAND HOLDING: Files April 2007 Operating Report ********* ADVANCED MARKETING: Files April 2007 Monthly Operating Report ------------------------------------------------------------- Advanced Marketing Services Inc.'s monthly operating report ending April 30, 2007, does not contain a balance sheet and income statement. Advanced Marketing Services, Inc. (Excluding Publishers Group West Incorporated) Statement of Cash Flows From April 1 to 30, 2007 CASH RECEIPTS B&T Purchase Price $11,637,105 Reimbursement under B&T TSA - Non-refundable inventory 354,916 Returnable inventory, net - CIA inventory - Vendor accounts receivable 2,900 Prepaid expenses - CSV Life Insurance - Foreign Subs 264,371 Standby L/C Expirations - WF Foothill Fee Reserve - Interest Income 33,801 Other 279,703 ---------- Total Cash Receipts 12,572,796 ---------- CASH DISBURSEMENTS Publisher payments - Payroll & health insurance 746,697 KERP - MIP - Insurance 60,615 Rent-facilities 312,295 Freight 701,572 Shipping Supplies - Utilities 96,073 IT Expenses 58,913 Travel 7,030 Professional fees 1,260,018 US Trustee Fees - Office equipment and supplies 6,866 Communications - Warehouse equipment 12,953 Directors' fees - Miscellaneous 82,747 Post-petition A/P - ---------- Total Disbursements 3,345,779 ---------- Net Operating Cash Inflow 9,227,017 INTERCOMPANY TRANSFERS PGW Rcpts Swept to AMS - AMS (To)/From PGW 1,500,000 Foreign Subsidiaries - ---------- Total I/C Transfers 1,500,000 ---------- Net Cash Inflow $10,727,017 ========== Publishers Group West Incorporated Statement of Cash Flows April 1 to 30, 2007 CASH RECEIPTS Accounts Receivable $7,538,844 Perseus - payments for post-petition returns - Perseus - reimbursement for customer deductions - Perseus - Transition service reimb (PGW costs) - Perseus - Transition service reimb (AMS costs) - Perseus - Retention plan reimbursement - Interest Income - Other 459 ---------- Total Cash Receipts 7,539,303 ---------- INVENTORY DISBURSEMENTS Publishers - Wires 82,918 Publishers - Checks 41,634 ---------- Total Inventory Disbursements 124,552 ---------- OPERATING DISBURSEMENTS Total Payroll (incl. taxes) 520,287 Employee retention plan - Temp/contract labor 73,979 Health Insurance - Insurance - Rent-facilities 23,018 Freight 231,334 Shipping supplies - Utilities 11,312 IT Expenses 854 Travel 56,685 Professional fees - Office equipment & supplies 12,054 Communications 12,851 Warehouse equipment - Directors' fees - Misc 135,513 Post-petition A/P - ---------- Total Operating Disbursements 1,077,887 ---------- Total Disbursements 1,202,439 ---------- Net Operating Cash Inflow 6,336,864 ---------- INTERCOMPANY TRANSFERS PGW Rcpts. Swept to AMS - AMS to/(from) PGW (1,500,000) Reimbursement to AMS - ---------- Total I/C Transfers (1,500,000) ---------- Net Cash Inflow $4,836,864 ========== About Advanced Marketing Based in San Diego, Calif., Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a plan expires on Aug. 10, 2007. (Advanced Marketing Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000). CATHOLIC CHURCH: Davenport Files May 2007 Monthly Operating Report ------------------------------------------------------------------ Diocese of Davenport in Iowa Statement of Financial Position As of May 31, 2007 ASSETS Current Assets Cash and cash equivalents - unrestricted $5,306,684 Cash and cash equivalents - restricted 2,455,723 Accounts receivable, net 28,210 Inventory - Prepaid expenses 1,778 Professional retainers 55,652 -------------- Total Current Assets 7,848,047 -------------- Property and Equipment Real Property 4,684,254 Machinery and equipment 6,000 Furniture and fixtures 8,914 Office equipment 59,500 Leasehold improvements - Vehicles 45,460 -------------- Total Property and Equipment 4,804,128 -------------- Total Assets $12,652,175 ============== LIABILITIES AND NET ASSETS Postpetition Current Liabilities: Salaries and wages Payroll taxes Real and personal property taxes Income taxes Sales taxes Notes payable, short term Accounts payable, trade $36,291 Real property lease arrearage Personal property lease arrearage Accrued professional fees Current portion of long-term debt Pass-through collections 210,311 -------------- Total Current Liabilities 246,602 -------------- Long-Term Postpetition Debt, Net - -------------- Total Postpetition Liabilities 246,602 -------------- Prepetition Secured claims - Priority unsecured claims 160,888 General unsecured claims 1,660,316 -------------- Total Prepetition Liabilities 1,821,204 -------------- Total Liabilities 2,067,806 -------------- Equity (deficit): Retained earnings/deficit at filing 5,795,187 Capital stock Additional paid-in capital Cumulative profit/loss since filing 991,214 Post-petition contributions/distributions or draws Market value adjustment 3,797,968 -------------- Total equity (deficit) 10,584,369 -------------- Total liabilities & equity (deficit) $12,652,175 ============== Diocese of Davenport in Iowa Statement of Operations For the month ending May 31, 2007 Revenues Gross sales $501 Less: sales returns & allowances - Net sales 501 Less: cost of goods sold - Gross profit 501 Interest 2,049 Other income: Charitable gifts 231,548 Insurance receipts 135,083 Investment income 57,393 -------------- Total revenues 426,574 -------------- Expenses: Compensation to owner(s)/officer(s) 12,578 Salaries 97,715 Commissions - Contract labor 7,585 Rent/Lease: Personal property 2,769 Real property 1,000 Insurance 90,049 Management fees - Depreciation 5,945 Taxes: Employer payroll taxes 6,174 Real property taxes - Other taxes - Other selling - Other administrative 37,899 Interest - Other expenses: Employee benefits 31,916 Charity collection 33,189 Medical assistance/Victim assistance 2,039 Utilities 9,276 Professional fees 812 -------------- Total expenses 338,946 -------------- Reorganization items: Professional fees (2,343) Provisions for rejected executory contracts - Interest earned on accumulated cash from resulting Chapter 11 case 17,083 Gain or (Loss) from sale of equipment - U.S. Trustee quarterly fees (1,250) Advertising/printing/mailing (1,383) -------------- Total reorganization items 12,107 -------------- Net profit (loss) before federal & state taxes 99,735 Federal & state income taxes - -------------- Net profit (loss) $99,735 ============= Diocese of Davenport in Iowa Statement of Cash Receipts and Disbursements For the month ending May 31, 2007 Cash receipts Rent/Leases collected $3,375 Cash received from sales 501 Interest received 19,132 Borrowings increase in accounts payable Funds from shareholders, partners, or other insiders Capital contributions Annual diocesan appeal/donations 231,548 Investment income/misc. - Insurance receipts 135,083 Tribunal/Immigration/Faith Formation fees 54,018 Decrease in prepaids/accounts receivable - Misc./Increase in accounts payable 75,792 -------------- Total Cash Receipts 519,449 Cash disbursements: Payments for inventory - Selling - Administrative 88,230 Capital expenditures - Principal payments on debt - Interest paid - Rent/Lease: Personal Property - Real Property - Amount paid to owner(s)/officer(s) Salaries 12,578 Draws - Commissions/Royalties - Expense Reimbursements - Other - Salaries/Commissions (less employee withholding 76,094 Management fees Taxes Employee withholding 21,621 Employer payroll taxes 6,174 Real property taxes - Other taxes - Other cash outflows: Insurance 90,049 Utilities 9,276 Medical Assistance 2,039 Employee benefits 31,916 Misc 37,736 -------------- Total Cash Disbursements 375,713 -------------- Net increase (decrease) in cash 143,736 Cash balance, beginning of period 1,425,807 Cash balance, end of period $1,569,543 ============== About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., of Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. Davenport's exclusive period to file a plan will expire on Aug. 15, 2007. Its exclusive period to solicit acceptances of its plan will expire on Oct. 14, 2007. (Catholic Church Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: San Diego Files April 2007 Operating Report ------------------------------------------------------------ Diocese of San Diego Statement of Financial Position As of April 30, 2007 ASSETS Cash and cash equivalents $17,311,230 Funds on deposit with administrative offices: - Perpetual Care Funds - Funds on deposit - Other funds on deposit - Marketable securities 39,205,604 Accounts receivable, net of allowance - Parishes and School 1,084,677 PSDL Trust 354,650 Cemetery trade 4,381,952 Tuition, fees and others 1,323,743 Juan Diego Trust 109,343 Notes and other receivables 36,986 Planned gifts receivable 5,357,998 Prepaid expenses 29,474 Inventory 14,507 Revisionary Interest in CSE 65,000,000 Property and equipment, net 20,879,056 Other land and buildings, net Cemetery inventory - graves, crypts & niches 6,622,972 Cemetery undeveloped land & outside property 1,365,793 Mater Dei land and land improvements 13,819,408 Mater Dei buildings 52,590,867 Oceanside land and land improvements 5,551,035 Other assets - -------------- Total Assets $235,039,295 ============== LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued liabilities $1,699,280 Special collections 257,327 Accrued vacation 359,067 Construction loan - ALSAM Foundation 38,620,000 Payable to PSDL Trust 23,285,353 Funds on deposit: Parish and school funds & endowments 397,409 Perpetual Care Funds - Restricted funds on deposit - Other diocesan entities funds - Reserve for worker's compensation claims 1,564,509 Priest retirement plan liability 1,994,494 Planned gifts liability 1,327,535 Deferred revenue: Annual Catholic Appeal - Cemetery 3,224,029 Tuition and other fees 1,399,729 Other 6,719 -------------- Total liabilities $74,135,452 -------------- Net Assets: Unrestricted: Undesignated $115,304,515 Insurance reserve funds 7,463,922 Bishop's burse 1,314,663 Designated funds 321,408 Property and equipment 16,581,782 -------------- Total unrestricted 140,986,290 Temporarily restricted 11,571,019 Permanently restricted 8,346,533 -------------- Total net assets 160,903,842 -------------- Total liabilities and net assets $235,039,295 ============== Diocese of San Diego Statement of Activities For the month ending April 30, 2007 Support and revenue: Parish assessments $602,641 Donations and fundraising 365,313 Investment income 744,965 Interest and other income 35,108 Parish & employee insurance reserve funds, net - Rental income 15,064 Administrative fees 291,956 Cemetery sales 266,012 Tuition, net of tuition assistance 667,091 Student and other fees 14,575 Concessions/food service 10,397 Other 34,882 -------------- Total support and revenue 3,048,005 Expenses: Administrative 259,126 Programs 319,093 Cemetery cost of sales 31,652 General: Contributions and charitable programs 42,864 Interest expense Funds on deposit 4,064 Other 156,864 Depreciation 41,495 Bad debt expense - Recruiting, advertising & public relations 3,928 Student related expenses 287,677 Concessions/food service 11,812 Athletics 21,248 Development/special events 1,900 Operating expenses 315,682 Chaplaincies and ministries 73,008 Assessments 760 Professional fees 3,172 Chapter 11 fees - Legal fees 7,736 Other 70,751 -------------- Total Expenses 1,652,879 Funds released from restricted funds 0 Net change in designated funds (4,951) -------------- (4,951) -------------- Increase (decrease) in net assets 1,395,126 -------------- Net assets: Beginning of month 159,508,716 -------------- End of month $160,903,842 ============== Diocese of San Diego Cash Receipts and Disbursement For the month ending April 30, 2007 Total receipts - prior general account reports $6,176,871 Less: total disbursements 2,881,319 Beginning balance 16,713,834 Receipts during current period: Transfers from main account Accounts receivable - pre-filing 380,177 Accounts receivable - assessment post-filing 463,997 Receipts - clearing 1,079,353 A/R CES 2,588 Annual Catholic Appeal 319,634 Interest 12,641 Dividends 198 Miscellaneous 5,323 Tribunal income 4,425 Southern Cross income 15,233 Programs and ministries 774,637 Registration and tuitions 355,327 Receipts - reimbursements and other 53,502 Unreconciled item 15,508 Other Diocesan locations' deposits 548,479 Stock processing 274,854 Athletics 1,010 Concessions and store sales 7,268 Restricted account receipts 5,697 Donations 27,638 -------------- Total receipts 4,347,497 Balance 21,061,332 Less: Total disbursements during current period Transfers to Diocese from Service Receipients Workers' compensation premium (153,360) Priest health - SIF Protion (5,776) Transfers to Priest Health Account 19,746 Transfers to payroll account 366,306 Transfers to medical reimbursement 247,137 Disbursements - clearing 36,818 Unreconciled items 216 Administrative 64,635 A/R CES 784 Athletics 7,347 Bank fees and charges 20,699 Brokerage commissions 378 Stock processing 274,854 Conferences 26,925 Utility deposits 27,740 Dues/Fees 2,569 Fundraising 2,671 Education expenses 4,775 Employee benefits 4,770 Facilities 25,303 Health insurance and benefits 63,659 Health insurance claims paid 972,150 Lay salaries and wages 11,412 Liability insurance 4,813 Maintenance/Repairs 23,719 Medical reimbursements 11,810 Ministries 7,620 Miscellaneous 47,003 Scholarships - Donations 100 Supplies 13,033 Operations 317,475 Payroll 459,678 Postage 11,706 Professional fees 44,141 Printing 17,230 Rent 19,445 Restricted 54,590 Sales tax 1,642 Special collections 148,251 Seminarian tuition 8,075 Stipends/Services 40,879 Utilities 14,217 Adjustment for February voids 50,674 -------------- 3,317,873 -------------- Ending balance $17,743,459 ============== About the San Diego Diocese The Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. The Diocese's exclusive period to file a chapter 11 plan of reorganization expires tomorrow, June 27, 2007. On March 27, 2007, the Debtor filed its plan and disclosure statement. (Catholic Church Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COLLINS & AIKMAN: Earns $23.8 Million in Period Ended May 15 ------------------------------------------------------------ Collins & Aikman Corporation Balance Sheet As of May 16, 2007 ASSETS Cash $187,718,722 Accounts receivable-trade, net 127,178,506 Other non-trade receivables 10,644,232 Inventories, net 33,853,422 Tooling and molding, net-current 49,668,790 Prepaids & other current assets 42,113,534 Deferred tax assets-current 0 --------------- TOTAL CURRENT ASSETS 451,177,206 Investments in subsidiaries 2,479,293,518 Fixed assets, net 232,774,692 Goodwill, net 59,622,121 Deferred tax assets-long term 0 Tooling and molding, net-long term 5,198,309 Other noncurrent assets 26,587,378 Intercompany accounts - net 85,238,673 Prepetition intercompany - net 670,316,228 --------------- TOTAL ASSETS $4,010,208,126 =============== LIABILITIES & EQUITY Notes payable $0 Short term borrowings 0 Advance on receivables 0 Current portion-long term debt 109,541,044 Current portion-capital leases 0 Accounts payable 52,670,262 Accrued interest payable 72,943,133 Accrued & other liabilities 134,548,423 Income taxes payable 3,053,922 --------------- Total current liabilities 372,756,783 Liabilities subject to compromise 2,384,702,468 Deferred income taxes 30,472,400 --------------- Total liabilities 2,787,931,651 Total equity 1,222,276,475 --------------- TOTAL LIABILITIES & EQUITY $4,010,208,126 =============== Collins & Aikman Corporation Income Statement Month Ending May 15, 2007 Net outside sales $64,276,570 I/C Net sales 3,567,576 --------------- Total sales 67,844,146 Cost of Sales 48,809,720 --------------- Gross profit 19,034,426 Selling, general & administrative expenses (2,034,037) --------------- Operating income 21,068,463 Interest expenses, net 3,904,282 Intercompany interest, net (1,669,844) Preferred stock accretion 0 Miscellaneous (income)/expense 0 Corporate allocation adjustment (4,950,442) Commission income (85,693) Commission expense 0 Royalty income (182,831) Royalty expense 0 Joint Venture (Income)/Expense 0 Minority interest in cons net income 0 Dividend income 0 Discount/Income for Carcorp. 0 Gain/(Loss) early extinguishments of debt 0 Discount/Premium on hedges 0 (Gain)/Loss on hedges 0 (Gain)/Loss on swaps 0 NAAIS Intercompany sales profit 0 Loss on sale of receivables 0 Restructuring provision 0 Asset Impairment 0 Foreign transactions - (Gain)/Loss 198,902 Amort of discount on NPV of liabilities 0 (Gain)/Loss on sale-leaseback transaction 0 --------------- Income from continuing operations before taxes 23,854,089 Federal income tax 0 State income tax 0 Foreign income tax 11,426 --------------- Income from continuing operations 23,842,663 Discontinued operations 7,595 Gain/Loss on sale of divisions 0 Extraordinary items 0 Integration 0 --------------- NET INCOME (LOSS) $23,835,068 =============== About Collins & Aikman Headquartered in Troy, Mich., Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtors with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. On Aug. 30, 2006, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Dec. 22, 2006, they filed an Amended Joint Chapter 11 Plan. The Court approved the adequacy of the Amended Disclosure Statement. The Court has adjourned the hearing to consider confirmation of the Amended Joint Plan to July 12, 2007. (Collins & Aikman Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) DELTA WOODSIDE: Files Operating Report for Period Ended May 5 ------------------------------------------------------------- Delta Woodside Industries Inc., Delta Mills Inc., and Delta Mills Marketing Inc. filed their monthly operating report for the period from April 1, 2007, to May 5, 2007, with the United States Bankruptcy Court for the District of Delaware on June 25, 2007. Delta Woodside Industries Inc. Delta Woodside Industries reported a net loss of $428 on zero revenue for the period from April 1, 2007, to May 5, 2007. At May 5, 2007, Delta Woodside's balance sheet showed: Total Current Assets ($245,000) Total Assets ($248,000) Total Liabilities ($17,238,000) Total Shareholders' Equity $16,990,000 A full-text copy of Delta Woodside's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?2136 Delta Mills Inc. Delta Mills reported a net loss of $886,095 on revenues of $912,101 for the period from April 1, 2007, to May 5, 2007. At May 5, 2007, Delta Mills' balance sheet showed: Total Current Assets $14,755,000 Total Assets $24,164,000 Total Liabilities [$56,644,000] Total Shareholders' Deficit ($32,480,000) A full-text copy of Delta Mill's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?2136 Delta Mills Marketing Inc. Delta Mills Marketing reported a net loss of $112,561 on zero revenue for the period April 1, 2007, to May 5, 2007. At May 5, 2007, Delta Mills Marketing's balance sheet showed: Total Current Assets $55,000 Total Assets $56,000 Total Liabilities [($2,145,000)] Total Shareholders' Equity $2,089,000 A full-text copy of Delta Mill's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?2136 About Delta Woodside Based in Greenville, South Carolina, Delta Woodside Industries, Inc. (OTCBB: DLWI), through its wholly owned subsidiary, Delta Mills, manufactures and sells textile products for the apparel industry. The company employs about 600 people and operates two plants located in South Carolina. The company, its wholly owned subsidiary Delta Mills Inc., and Delta Mills Marketing Inc., the wholly owned subsidiary of Delta Mills, filed for chapter 11 protection on Oct. 13, 2006 (Bank. D. Del. Lead Case No. Case Nos. 06-11144). Robert J. Dehney, Esq., Margaret E. Juliano, Esq., Robert J. Dehney, Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP represent the Debtors. Jeffrey R. Waxman, Esq., and Mark E. Felger, Esq., at Cozen O'Connor, represent the Official Committee of Unsecured Creditors. DELTA WOODSIDE: Files Operating Report for Period Ended March 31 ---------------------------------------------------------------- Delta Woodside Industries Inc., Delta Mills Inc., and Delta Mills Marketing Inc. filed their monthly operating report for the period from March 4, 2007, to March 31, 2007, with the United States Bankruptcy Court for the District of Delaware on June 25, 2007. Delta Woodside Industries Inc. Delta Woodside Industries reported a net loss of $428 on zero revenue for the for the period from March 4, 2007, to March 31, 2007. At March 31, 2007, Delta Woodside's balance sheet showed: Total Current Assets ($248,000) Total Assets ($248,000) Total Liabilities ($17,238,000) Total Shareholders' Equity $16,991,000 A full-text copy of Delta Woodside's March 2007, Monthly Operating Report is available at no charge at: http://ResearchArchives.com/t/s?213a Delta Mills Inc. Delta Mills reported a net loss of $1,098,487 on revenues of $567,758 for the period March 4, 2007, to March 31, 2007. At March 31, 2007, Delta Mills' balance sheet showed: Total Current Assets $15,926,000 Total Assets $25,347,000 Total Liabilities [$56,940,000] Total Shareholders' Deficit ($31,593,000) A full-text copy of Delta Mill's March 2007, Monthly Operating Report is available at no charge at: http://ResearchArchives.com/t/s?213a Delta Mills Marketing Inc. Delta Mills Marketing reported a net loss of $123,229 on zero revenue for the period from March 4, 2007, to March 31, 2007. At March 31, 2007, Delta Mills Marketing's balance sheet showed: Total Current Assets $55,000 Total Assets $55,000 Total Liabilities [($2,161,000)] Total Shareholders' Equity $2,212,000 A full-text copy of Delta Mill's March 2007 Monthly Operating Report is available at no charge at: http://ResearchArchives.com/t/s?213a About Delta Woodside Based in Greenville, South Carolina, Delta Woodside Industries, Inc. (OTCBB: DLWI), through its wholly owned subsidiary, Delta Mills, manufactures and sells textile products for the apparel industry. The company employs about 600 people and operates two plants located in South Carolina. The company, its wholly owned subsidiary Delta Mills Inc., and Delta Mills Marketing Inc., the wholly owned subsidiary of Delta Mills, filed for chapter 11 protection on Oct. 13, 2006 (Bank. D. Del. Lead Case No. Case Nos. 06-11144). Robert J. Dehney, Esq., Margaret E. Juliano, Esq., Robert J. Dehney, Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP represent the Debtors. Jeffrey R. Waxman, Esq., and Mark E. Felger, Esq., at Cozen O'Connor, represent the Official Committee of Unsecured Creditors. DELTA WOODSIDE: Files Operating Report for Period Ended March 3 --------------------------------------------------------------- Delta Woodside Industries Inc., Delta Mills Inc., and Delta Mills Marketing Inc. filed their monthly operating report for the period from Feb. 4, 2007, to March 3, 2007, with the United States Bankruptcy Court for the District of Delaware on June 25, 2007. Delta Woodside Industries Inc. Delta Woodside Industries reported a net loss of $5,906 on zero revenue for the period from Feb. 4, 2007, to March 3, 2007. At March 3, 2007, Delta Woodside's balance sheet showed: Total Current Assets ($247,000) Total Assets ($247,000) Total Liabilities ($17,238,000) Total Shareholders' Equity $16,991,000 A full-text copy of Delta Woodside's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?2137 Delta Mills Inc. Delta Mills reported a net loss of $22,337,339 on revenues of $817,027 for the period from Feb. 4, 2007, to March 3, 2007. At March 3, 2007, Delta Mills' balance sheet showed: Total Current Assets $17,703,000 Total Assets $27,132,000 Total Liabilities [$57,627,000] Total Shareholders' Deficit ($30,495,000) A full-text copy of Delta Mill's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?2137 Delta Mills Marketing Inc. Delta Mills Marketing reported a net loss of $137,956 on zero revenue for the period from Feb 4, 2007, to March 3, 2007. At March 3, 2007, Delta Mills Marketing's balance sheet showed: Total Current Assets $9,000 Total Assets $10,000 Total Liabilities [($2,330,000)] Total Shareholders' Equity $2,336,000 A full-text copy of Delta Mill's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?2137 About Delta Woodside Based in Greenville, South Carolina, Delta Woodside Industries, Inc. (OTCBB: DLWI), through its wholly owned subsidiary, Delta Mills, manufactures and sells textile products for the apparel industry. The company employs about 600 people and operates two plants located in South Carolina. The company, its wholly owned subsidiary Delta Mills Inc., and Delta Mills Marketing Inc., the wholly owned subsidiary of Delta Mills, filed for chapter 11 protection on Oct. 13, 2006 (Bank. D. Del. Lead Case No. Case Nos. 06-11144). Robert J. Dehney, Esq., Margaret E. Juliano, Esq., Robert J. Dehney, Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP represent the Debtors. Jeffrey R. Waxman, Esq., and Mark E. Felger, Esq., at Cozen O'Connor, represent the Official Committee of Unsecured Creditors. DELTA WOODSIDE: Files Operating Report for Period Ended February 3 ------------------------------------------------------------------ Delta Woodside Industries Inc., Delta Mills Inc., and Delta Mills Marketing Inc. filed their monthly operating report for the period from Jan. 1, 2007, to Feb. 3, 2007, with the United States Bankruptcy Court for the District of Delaware on March 29, 2007. Delta Woodside Industries Inc. Delta Woodside Industries reported a net loss of $9,670 on zero revenue for the period from Jan. 1, 2007, to Feb. 3, 2007. At Feb. 3, 2007, Delta Woodside's balance sheet showed: Total Current Assets ($246,000) Total Assets ($246,000) Total Liabilities ($17,389,000) Total Shareholders' Equity $16,997,000 A full-text copy of Delta Woodside's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?1cca Delta Mills Inc. Delta Mills reported a net loss of $614,015 on revenues of $2,532,881 for the period from Jan. 1, 2007, to Feb. 3, 2007. At Feb. 3, 2007, Delta Mills' balance sheet showed: Total Current Assets $17,742,000 Total Assets $49,495,000 Total Liabilities [$57,652,000] Total Shareholders' Deficit ($8,158,000) A full-text copy of Delta Mill's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?1cca Delta Mills Marketing Inc. Delta Mills Marketing reported a net loss of $51,783,956 on zero revenue for the period from Jan. 1, 2007, to Feb. 3, 2007. At Feb. 3, 2007, Delta Mills Marketing's balance sheet showed: Total Current Assets $12,000 Total Assets $12,000 Total Liabilities [($2,466,000)] Total Shareholders' Equity $2,473,000 A full-text copy of Delta Mill's Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?1cca About Delta Woodside Based in Greenville, South Carolina, Delta Woodside Industries, Inc. (OTCBB: DLWI), through its wholly owned subsidiary, Delta Mills, manufactures and sells textile products for the apparel industry. The company employs about 600 people and operates two plants located in South Carolina. The company, its wholly owned subsidiary Delta Mills Inc., and Delta Mills Marketing Inc., the wholly owned subsidiary of Delta Mills, filed for chapter 11 protection on Oct. 13, 2006 (Bank. D. Del. Lead Case No. Case Nos. 06-11144). Robert J. Dehney, Esq., Margaret E. Juliano, Esq., Robert J. Dehney, Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP represent the Debtors. Jeffrey R. Waxman, Esq., and Mark E. Felger, Esq., at Cozen O'Connor, represent the Official Committee of Unsecured Creditors. HANCOCK FABRICS: Posts $5.7 Mil. Net Loss in Period Ended June 2 ---------------------------------------------------------------- Hancock Fabrics, Inc., and Subsidiaries Consolidated Balance Sheet As of June 2, 2007 ASSETS Current assets: Cash and cash equivalents $3,838,000 Receivables, less allowance for doubtful accounts 5,530,000 Inventories 81,494,000 Income taxes refundable 7,116,000 Prepaid expenses 2,423,000 ------------ Total current assets 100,401,000 Property and equipment, at depreciated cost 48,802,000 Other assets 15,736,000 ------------ Total Assets $164,939,000 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities not subject to compromise: Accounts Payable $10,154,000 Credit facility: DIP financing 10,596,000 Accrued liabilities 8,960,000 Deferred tax liabilities 7,152,000 ------------ Liabilities subject to compromise: Accounts payable 30,554,000 Accrued liabilities 11,902,000 Long-term lease financing obligations 3,997,000 Capital lease obligations 1,726,000 Post-retirement benefits other than pensions 9,345,000 Pension and SERP liabilities 8,498,000 Other liabilities 9,575,000 ------------ Total liabilities 112,459,000 ------------ Total shareholders' equity 52,480,000 ------------ Total liabilities & shareholders' equity $164,939,000 ============ Hancock Fabrics, Inc., and Subsidiaries Consolidated Statement of Operations For the Month Ended June 2, 2007 Sales $27,876,000 Cost of goods sold 20,377,000 ------------ Gross profit 7,499,000 Selling, general and administrative expense 10,407,000 Depreciation and amortization 410,000 ------------ Operating income (loss) (3,318,000) Reorganization expenses 2,129,000 Interest expense, net 261,000 Earnings (loss) before income taxes (5,708,000) Income taxes - ------------ Net earnings (loss) ($5,708,000) ============ Hancock Fabrics, Inc., and Subsidiaries Consolidated Statement of Cash Flow For the Month Ended June 2, 2007 Cash flows from operating activities: Net earnings ($5,708,000) Adjustments to reconcile net earnings to cash flows used in operating activities Depreciation and amortization 613,000 Amortization of deferred loans 83,000 LIFO charge (credit) (3,596,000) Amortization of deferred compensation on restricted stock incentive plan 55,000 Reserve for store closings credits (134,000) Reserve for obsolete inventory (8,000) Reserve for sales returns bad debts - Stepped rent accrual (111,000) Loss of disposition of property & equipment 72,000 Stock compensation expense 70,000 (Increase) decrease in assets Receivable and prepaid expenses (924,000) Inventory at current cost 13,758,000 Income tax refundable 0 Other non-current assets 167,000 Increase (decrease) in liabilities Accounts payable 840,000 Accrued liabilities (665,000) Income taxes payable 0 Postretirement benefits other than pension (43,000) Long-term pension and SERP liabilities 156,000 Reserve for store closings (202,000) Other liabilities (44,000) ----------- Net cash used in operating activities 4,379,000 Cash flows from investing activities: Additions to property and equipment (42,000) Proceeds from the disposition of property and equipment 282,000 ------------ Net cash used in investing activities 240,000 Cash flows from financing activities: Net borrowing on revolving credit agreement (5,297,000) Payments for lease financing (7,000) Payments for capital leases (3,000) Tax obligation settled with treasury stock - ------------ Net cash provided by financing activities (5,307,000) Decrease in cash and cash equivalents (688,000) Cash and cash equivalents, beginning of period 4,526,000 ------------ Cash and cash equivalents, end of period $3,838,000 ============ About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: HancockFabrics.com Files Schedules --------------------------------------------------- HancockFabrics.com, Hancock Fabrics Inc.'s debtor-affiliate, filed with the United States Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.16 Accounts receivable Credit Card Receivable 18,254 B.22 Patents, copyrights & trademarks undetermined B.29 Machinery, furniture and fixtures Furniture, Fixtures & Equipment $158,452 B.30 Inventory Retail Inventory 466,767 TOTAL SCHEDULED ASSETS $1,764,017 =========== C. Property Claimed as Exempt Not applicable D. Creditors Holding Secured Claims Wachovia Bank, NA $53,224,413 Wachovia Bank, NA 8,711,508 E. Creditors Holding Unsecured Priority Claims Taxes 0 F. Creditors Holding Unsecured Claims Non-Priority Claims 0 TOTAL SCHEDULED LIABILITIES $61,935,921 ============ About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: HF Enterprise Files Schedules of Assets & Debts ---------------------------------------------------------------- HF Enterprise, Hancock Fabrics Inc.'s debtor-affiliate, filed with the United States Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.1 Cash on hand 0 B.2 Bank accounts PNC Bank 1,737 PNC Bank 18,149 B.13 Stock and Interests undetermined B.16 Accounts receivable Royalty due from Hancock Merchandising 7,836,596 B.22 Patents, copyrights & trademarks undetermined B.23 Licenses & franchises undetermined TOTAL SCHEDULED ASSETS $7,856,482 ============ C. Property Claimed as Exempt Not applicable D. Creditors Holding Secured Claims Wachovia Bank, NA $53,224,413 Wachovia Bank, NA 8,711,508 E. Creditors Holding Unsecured Priority Claims Taxes 0 F. Creditors Holding Unsecured Claims Non-Priority Claims 0 TOTAL SCHEDULED LIABILITIES $61,935,921 ============ About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Hancock Fabrics LLC Files Schedules ---------------------------------------------------- Hancock Fabrics LLC, Hancock Fabrics Inc.'s debtor-affiliate, filed with the United States Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.1 Cash on hand 5,175 B.2 Bank accounts Wells Fargo 29,123 Wells Fargo 20,536 Westamerica Bank 17,672 Others 23,126 B.3 Security Deposits 0 B.4 Household goods 0 B.5 Book, art work & collectibles 0 B.6 Wearing apparel 0 B.7 Furs and jewelry 0 B.8 Firearms and sporting goods 0 B.9 Interests in Insurance Policies 0 B.10 Annuities 0 B.11 Interests in education IRA 0 B.12 Interests in retirement plans 0 B.13 Stock and Interests 0 B.14 Interests in joint ventures 0 B.15 Government & corporate bonds 0 B.16 Accounts receivable 0 B.17 Alimony 0 B.18 Other liquidated debts owed 0 B.19 Equitable or future interests 0 B.20 Contingent & contingent interests 0 B.21 Other contingent & unliquidated claims 0 B.22 Patents, copyrights & trademarks 0 B.23 Licenses & franchises 0 B.24 Other intangibles 0 B.25 Automobiles 0 B.26 Boats 0 B.27 Aircraft 0 B.28 Office eqpt., furnishings and supplies 0 B.29 Machinery, furniture and fixtures Furniture, Fixtures & Equipment 411,666 Leasehold Improvements 10,096 B.30 Inventory Pattern Inventory 338,424 Retail Inventory 3,032,686 B.31 Animals 0 B.32 Crops 0 B.33 Farming equipment 0 B.34 Farm supplies 0 B.35 Other personal property 0 TOTAL SCHEDULED ASSETS $3,888,504 =========== C. Property Claimed as Exempt Not applicable D. Creditors Holding Secured Claims Wachovia Bank, NA $53,224,413 Wachovia Bank, NA 8,711,508 E. Creditors Holding Unsecured Priority Claims Taxes Fresno County 214 County of Santa Clara 166 Butte County Treasurer 151 Humboldt County 144 Sacramento County 146 Others 1,958 F. Creditors Holding Unsecured Claims Non-Priority Claims Redland-Branson Development 25,473 Cypress Group 39,679 Hallaian Brother #1 12,055 Kohl's Department Store 11,247 Others 111,790 TOTAL SCHEDULED LIABILITIES $62,138,944 ============ About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: HF Merchandising Files Schedules ------------------------------------------------- HF Merchandising, Hancock Fabrics Inc.'s debtor-affiliate, filed with the United States Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.29 Machinery, furniture and fixtures Furniture, Fixtures & Equipment 7,935,148 B.30 Inventory Retail Inventory 14,168,577 TOTAL SCHEDULED ASSETS $22,103,725 ============ C. Property Claimed as Exempt Not applicable D. Creditors Holding Secured Claims Wachovia Bank, NA $53,224,413 Wachovia Bank, NA 8,711,508 E. Creditors Holding Unsecured Priority Claims Taxes 0 F. Creditors Holding Unsecured Claims Non-Priority Claims HF Enterprises, Inc. 7,836,597 HF Resources, Inc. 44,536,120 TOTAL SCHEDULED LIABILITIES $114,308,638 ============= About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Hancock Fabrics of MI Files Schedules ------------------------------------------------------ Hancock Fabrics of MI, Hancock Fabrics Inc.'s debtor-affiliate, has filed with the United States Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.1 Cash on hand 2,750 B.2 Bank accounts Bank One 3,578 Bank One 2,790 Charter One 5,238 Comerica 13,090 Huntington National Bank 2,112 National City 3,066 B.25 Automobiles 5,213 B.29 Machinery, furniture and fixtures Furniture, Fixtures & Equipment 66,454 Leasehold Improvements 781 B.30 Inventory Pattern Inventory 169,212 Retail Inventory 1,489,733 TOTAL SCHEDULED ASSETS $1,764,017 =========== C. Property Claimed as Exempt Not applicable D. Creditors Holding Secured Claims Wachovia Bank, NA $53,224,413 Wachovia Bank, NA 8,711,508 E. Creditors Holding Unsecured Priority Claims Taxes 1,371 F. Creditors Holding Unsecured Claims Non-Priority Claims Harold L. Brander, J 38,153 Rubloff Development 7,967 Eleven-Dequindre Associates 7,102 Others 13,436 TOTAL SCHEDULED LIABILITIES $62,003,950 ============ About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: HF Resources Files Schedules of Assets & Debts --------------------------------------------------------------- HF Resources Inc., Hancock Fabrics Inc.'s debtor-affiliate, has filed with the United States Bankruptcy Court for the District of Delaware, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.1 Cash on hand 0 B.2 Bank accounts PNC Bank 1,708 PNC Bank 15,578 B.13 Stock and Interests undetermined B.16 Accounts receivable Due from Hancock Fabrics, Inc. 181,592,642 Due from HF Merchandising, Inc. 44,536,120 TOTAL SCHEDULED ASSETS $226,146,048 ============= C. Property Claimed as Exempt Not applicable D. Creditors Holding Secured Claims Wachovia Bank, NA $53,224,413 Wachovia Bank, NA 8,711,508 E. Creditors Holding Unsecured Priority Claims Taxes 0 F. Creditors Holding Unsecured Claims Non-Priority Claims 0 TOTAL SCHEDULED LIABILITIES $61,935,921 ============ About Hancock Fabrics Headquartered in Baldwyn, Miss., Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 12, http://bankrupt.com/newsstand/or 215/945-7000). MORTGAGE LENDERS: Posts $7.9 Million Net Loss in May 2007 --------------------------------------------------------- Mortgage Lenders Network USA, Inc. Balance Sheet As of May 31, 2007 Assets: Cash and Cash Equivalents $17,464,140 Mortgage loans held for sale 739,165 Portfolio loans 0 Allowance for loan losses 0 Capitalized Mortgage Servicing rights, net 0 Retained interests in securitization, at fair value 0 Furniture, fixtures, equipment, an software, net 3,187,970 Deferred Costs 0 Principal & Interest Advances 329,541 Interest in subsidiaries 0 Other Assets 10,575,255 ------------ Total Assets $32,296,071 ============ Liabilities: Accounts Payable prepetition $14,473,859 Accounts Payable postpetition 110,142 Accrued Expenses - Payroll 989,811 Accrued Expenses - Other 15,509,179 Warehouse Borrowings 22,987,992 Convertible Debt 1,500,000 Servicing & Working Capital Advances 54,408,435 Capital Lease Liability 6,258 Other liabilities 31,248,741 ------------ Total Liabilities 141,234,417 Stockholders' Equity: Common Stock 625,000 Additional Paid-In Capital 1,829,770 Retained Earnings (110,552,116) ------------ Total Stockholders' Equity (108,097,346) ------------ Total Debts & Stockholders' Equity $33,137,071 ============ * * * The Debtor notes that an $841,000 adjustment was made to Retained Earnings for the period ended May 31, 2007. This adjustment was due to accrued taxes in 2006 that will not be paid. As a result, the payable was reduced and the expense was reversed with a transaction date of Dec. 31, 2006. Mortgage Lenders Network USA, Inc. Schedule of Cash Receipts and Disbursements Month Ended May 31, 2007 Cash - Beginning of Month $286,713 Receipts: Net Servicing Inflows 398,548 Warehouse and Loan Sale Inflows 111,884 Sale of Fixed Assets 903,539 Sale of Other Assets 4,256,260 Other Inflows 1,808,350 Transfers from Cash Collateral 0 ------------ Total Receipts 7,478,581 Disbursements: Net Payroll 394,865 Payroll Taxes 45,703 Medical Coverage Sub/ FSA Witholding 8,359 Operating Expenses 478,190 Rent 133,032 Utilities 0 Insurance 0 Administrative & Selling 0 Other 0 Professional Fees Escrow Account 236,237 Professional Fees Paid 0 U.S. Trustee Fees 0 DIP Fees (50,000) Transfers to Cash Collateral 600,000 ------------ Total Disbursements 1,846,386 Net Cash Flow 5,632,195 ------------ Cash - End of Month $5,918,908 ============ Mortgage Lenders Network USA, Inc. Income Statement Month Ended May 31, 2007 Revenue Gain on Sale - Subprime ($5,643,220) Gain on Sale - SRP/MBS (2,807,823) Mortgage origination income 143 Net Warehouse interest income (511,834) Servicing income, net 250,164 Other Income (16,189,035) ------------ Total Revenues ($24,901,606) ------------ Expenses Salaries $299,138 Overtime/Temp Help 1,133 Bonus/Incentives 0 Benefits 493,575 Rent Expense 3,141,281 Telephone 13,465 Repairs & Maintenances 43,661 Office & Supplies Expense (1,584) Postage/Express Mail 93,716 Service Bureau 205,224 Consulting Fees 35,595 Insurance 231,562 Loan Loss/Foreclosure Exp. (23,988,995) Appraisal/Credit Expenses (368) Travel & Entertainment 53,346 Meetings/Seminars/Education 14,738 Membership Fes/Dues/Filings 1,002,424 Advertising - Other 27,914 Interest Expense - Other 1,250 Legal/Regulatory Expese 43,146 Miscellaneous Expenses 894,031 ------------ Total Expenses Before Depreciation (17,395,747) Depreciation Expense 0 ------------ Net Profit Before Reorganization Items (7,505,859) Reorganization Items Professional Fees ------------ Total Reorganization Items 408,807 Income Taxes 0 ------------ Net Income (Loss) ($7,914,666) ============ During May 2007, the Debtor paid $409,519 in professional fees to Scouler Andrews; $305,970 to Pachulski, Stang, Ziel, Young; $152,014 to Blank Rome; $250,000 to Dechart. Around $16,193 in miscellaneous fees was also reported. Since filing for bankruptcy, the Debtor has paid $1,388,654 to Scouler Andrews, $405,970 to Pachulski, Stang, Ziel, Young, $152,014 to Blank Rome, $57,701 to The Trumbull Group, and $250,000 to Dechart. About Mortgage Lenders Middletown, Conn.-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl Young Jones & Weintraub LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan expires on Oct. 3, 2007. (Mortgage Lenders Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000). MORTGAGE LENDERS: Posts $136 Million Net Loss in April 2007 ----------------------------------------------------------- Mortgage Lenders Network USA, Inc. Balance Sheet As of April 30, 2007 Assets: Cash and Cash Equivalents $17,091,406 Mortgage loans held for sale 35,993,542 Portfolio loans 10,142,343 Allowance for loan losses (24,401,101) Capitalized Mortgage Servicing rights, net 0 Retained interests in securitization, at fair value 0 Furniture, fixtures, equipment, an software, net 20,272,541 Deferred Costs 0 Principal & Interest Advances 1,765,944 Interest in subsidiaries 1,534 Other Assets 17,523,142 ------------ Total Assets $78,389,352 ============ Liabilities: Accounts Payable prepetition $14,459,741 Accounts Payable postpetition 385,503 Accrued Expenses - Payroll 1,000,833 Accrued Expenses - Other 18,235,530 Warehouse Borrowings 56,144,324 Convertible Debt 1,500,000 Servicing & Working Capital Advances 54,408,435 Capital Lease Liability 6,258 Other liabilities 32,431,409 ------------ Total Liabilities 178,572,032 Stockholders' Equity: Common Stock 625,000 Additional Paid-In Capital 1,829,770 Retained Earnings (102,637,450) ------------ Total Stockholders' Equity (100,182,680) ------------ Total Debts & Stockholders' Equity $78,389,352 ============ Mortgage Lenders Network USA, Inc. Schedule of Cash Receipts and Disbursements Month Ended April 30, 2007 Cash - Beginning of Month $2,270,308 Receipts: Net Servicing Inflows 978,344 Warehouse and Loan Sale Inflows 44,812 Sale of Fixed Assets 0 Sale of Other Assets 186,219 Other Inflows 22,395 Transfers from Cash Collateral 2,000,000 ------------ Total Receipts 3,231,770 Disbursements: Net Payroll 465,792 Payroll Taxes 38,620 Medical Coverage Sub/ FSA Withholding 10,108 Operating Expenses 106,319 Rent 132,996 Utilities 0 Insurance 43,243 Administrative & Selling 0 Other 0 Professional Fees Escrow Account 3,018,037 Professional Fees Paid 0 U.S. Trustee Fees 250 DIP Fees 0 Transfers to Cash Collateral 1,400,000 ------------ Total Disbursements 5,215,365 Net Cash Flow (1,983,595) ------------ Cash - End of Month $286,713 ============ Mortgage Lenders Network USA, Inc. Income Statement Month Ended April 30, 2007 Revenue Gain on Sale - Subprime ($41,475,327) Gain on Sale - SRP/MBS (71,343,323) Mortgage origination income 7,128 Net Warehouse interest income 4,730,993 Servicing income, net 12,103,167 Other Income (12,005,406) ------------ Total Revenues ($107,982,768) ------------ Expenses Salaries $18,687,282 Overtime/Temp Help 222,035 Bonus/Incentives (7,592) Benefits 745,603 Rent Expense 696,193 Telephone 518,988 Repairs & Maintenances 219,256 Office & Supplies Expense 362,362 Postage/Express Mail 264,659 Service Bureau 947,551 Consulting Fees 875,630 Insurance 52,677 Loan Loss/Foreclosure Exp. 148,780 Appraisal/Credit Expenses 255,312 Travel & Entertainment 81,369 Meetings/Seminars/Education 40,444 Membership Fes/Dues/Filings 344,575 Advertising - Other 92,855 Interest Expense - Other 523,287 Legal/Regulatory Expese 139,579 Miscellaneous Expenses 777,952 ------------ Total Expenses Before Depreciation 25,988,795 Depreciation Expense 1,143,563 ------------ Net Profit Before Reorganization Items (135,115,126) Reorganization Items Professional Fees 1,136,837 ------------ Total Reorganization Items 1,136,837 Income Taxes 0 ------------ Net Income (Loss) ($136,251,962) ============ During April 2007, the Debtor paid $32,701 in professional fees to The Trumbull Group. Since filing for bankruptcy, the Debtor has paid $979,135 to Scouler Andrews, $100,000 to Pachulski, Stang, Ziel, Young, and $57,701 to The Trumbull Group. About Mortgage Lenders Middletown, Conn.-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl Young Jones & Weintraub LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan expires on Oct. 3, 2007. (Mortgage Lenders Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000). MUSICLAND HOLDING: Posts $138,000 Net Loss in May 2007 ------------------------------------------------------ Musicland Holding Corp. Consolidated Balance Sheet As of May 31, 2007 ASSETS Current Assets Cash $11,729,000 Letters of Credit/Other Deposits 415,000 Other Amounts due from TransWorld 1,300,000 Receivables from Sub-leases 774,000 Amounts due from GOB sales - Miscellaneous CC 29,000 Vendors Credit due from services 1,541,000 ------------- Total 15,788,000 ============= Fixed Assets 0 Other assets Transport Logistic deposit - Insurance Deposits 3,977,000 Utility and Tax Deposits - ------------- TOTAL ASSETS $19,765,000 ============= Liabilities & Shareholders' deficit Current liabilities Accounts payable Due to Transworld $0 Due to Deluxe 0 Expense accruals 2,840,000 Other accrued liabilities Logistic Accrual - Deferred Income - Insurance Reserve 3,380,000 Accrued Payroll & Employee Benefits: Accrued Vacation - Accrued Severance - Accrued Employer Payroll Taxes - Accrued Benefits - Sales Tax - 5% Admin. Fee on Wachovia L/C 250,000 FY06 Tax Return & Employee Benefit Audit Services - Payroll/W2 & 1099 System - Miscellaneous 29,000 Gift Card liabilities 0 ------------- Total 3,659,000 ------------- DIP financing 0 Other LT Liabilities 0 Liabilities subject to compromise 315,047,000 Shareholders' deficit (301,781,000) ------------- TOTAL LIABILITIES & SHAREHOLDERS' DEFICIT $19,765,000 ============= Musicland Holding Corp. Statement of Operations For the Month Ended May 31, 2007 Merchandise revenue - Non-merchandise revenue - Net sales - Cost of good sold - Gross Profit - Store operating expenses Payroll - Occupancy - Other $2,000 ------------- Store expenses 0 ------------- General & administrative 2,000 ------------- EBITDA (Loss) 2,000 Hilco 340 Store GOB - Chapter 11 & related charges (200,000) Sale to Transworld 0 Hilco 65 0 Media Play Wind down 0 Depreciation & Amortization 0 ------------- Operating income (Loss) (198,000) Interest income (expense) 46,000 Other non-operating charges 14,000 ------------- Earnings before Taxes (138,000) ------------- Income tax 0 ------------- Net earnings (Loss) ($138,000) ============= Musicland Holding Corp. Statements of Cash Flow For the Month Ended May 31, 2007 Operating activities Net earnings (Loss) ($138,000) Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Loss on utility deposits write off Changes in operating assets & liabilities: Inventory - Other current assets 59,000 Other Non-current Assets - Accounts payable - Other accrued liabilities - - Liabilities subject to compromise - ------------- Net cash provided by (used in) operating activities (79,000) ------------- Investing activities Change in other long term asset/liabilities - Retirement of fixed assets - Net cash - Financing activities Distribution to Secured Creditors - ------------- Increase/decrease in cash (79,000) ------------- Cash at the beginning of Period 11,808,000 ------------- Cash at the end of Period $11,729,000 ============= About Musicland Holding Corp. Headquartered in New York City, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. (Musicland Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MUSICLAND HOLDING: Files April 2007 Operating Report ---------------------------------------------------- Musicland Holding Corp. Consolidated Balance Sheet As of April 30, 2007 ASSETS Current Assets Cash $11,808,000 Letters of Credit/Other Deposits 415,000 Other Amounts due from TransWorld 1,300,000 Receivables from Sub-leases 774,000 Amounts due from GOB sales - Miscellaneous CC 29,000 Vendors Credit due from services 1,600,000 ------------- Total 15,926,000 ============= Fixed Assets 0 Other assets Transport Logistic deposit - Insurance Deposits 3,977,000 Utility and Tax Deposits - ------------- TOTAL ASSETS $19,903,000 ============= Liabilities & Shareholders' deficit Current liabilities Accounts payable Due to Transworld $0 Due to Deluxe 0 Expense accruals $2,840,000 Other accrued liabilities Logistic Accrual - Deferred Income - Insurance Reserve 3,380,000 Accrued Payroll & Employee Benefits: Accrued Vacation - Accrued Severance - Accrued Employer Payroll Taxes - Accrued Benefits - Sales Tax - 5% Admin. Fee on Wachovia L/C 250,000 FY06 Tax Return & Employee Benefit Audit Services - Payroll/W2 & 1099 System - Miscellaneous 29,000 Gift Card liabilities 0 ------------- Total 3,659,000 ------------- DIP financing 0 Other LT Liabilities 0 Liabilities subject to compromise 315,047,000 Shareholders' deficit (301,643,000) ------------- TOTAL LIABILITIES & SHAREHOLDERS' DEFICIT $19,903,000 ============= Musicland Holding Corp. Statement of Operations For the Month Ended April 30, 2007 Merchandise revenue - Non-merchandise revenue - Net sales - Cost of good sold - Gross Profit - Store operating expenses Payroll - Occupancy - Other ($16,000) ------------- Store expenses 0 ------------- General & administrative (16,000) ------------- EBITDA (Loss) (16,000) Hilco 340 Store GOB - Chapter 11 & related charges (343,000) Sale to Transworld 0 Hilco 65 0 Media Play Wind down 0 Depreciation & Amortization 0 ------------- Operating income (Loss) (359,000) Interest income (expense) 45,000 Other non-operating charges 96,000 ------------- Earnings before Taxes (218,000) ------------- Income tax 0 ------------- Net earnings (Loss) ($218,000) ============= Musicland Holding Corp. Statements of Cash Flow For the Month Ended April 30, 2007 Operating activities Net earnings (Loss) ($218,000) Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Loss on utility deposits write off Changes in operating assets & liabilities: Inventory - Other current assets - Other Non-current Assets - Accounts payable - Other accrued liabilities - - Liabilities subject to compromise - ------------- Net cash provided by (used in) operating activities (218,000) ------------- Investing activities Change in other long term asset/liabilities - Retirement of fixed assets - Net cash - Financing activities Distribution to Secured Creditors - ------------- Increase/decrease in cash (218,000) ------------- Cash at the beginning of Period 12,026,000 ------------- Cash at the end of Period $11,808,000 ============= About Musicland Holding Corp. Headquartered in New York City, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. (Musicland Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000 ********* 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. 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The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. 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. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Sheena Jusay, and Peter A. Chapman, Editors. Copyright 2007. 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 $775 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 ***