-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IUWXA38rpGhnblVUq/Ys9af/EfHFskcOuZyv8Hy07i0PUKtODxToBoLwvDIWT3Uj 9fI/km2+0syG6C+TWDujUg== 0000893220-03-000082.txt : 20030128 0000893220-03-000082.hdr.sgml : 20030128 20030128172902 ACCESSION NUMBER: 0000893220-03-000082 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030121 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGHLANDS INSURANCE GROUP INC CENTRAL INDEX KEY: 0001002816 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 752370945 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14028 FILM NUMBER: 03528544 BUSINESS ADDRESS: STREET 1: 1000 LENOX DRIVE E CITY: LAWRENCEVILLE STATE: NJ ZIP: 08648 BUSINESS PHONE: 7139529555 MAIL ADDRESS: STREET 1: 1000 LENOX DRIVE E CITY: LAWRENCEVILLE STATE: NJ ZIP: 08648 8-K 1 w82876e8vk.txt FORM 8-K DATED JANUARY 21, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 21, 2003 HIGHLANDS INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 1-14028 75-2370945 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 275 Phillips Boulevard, Trenton, New Jersey 08618-1426 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (609) 896-1921 (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS On October 31, 2002, Highlands Insurance Group, Inc. (the "Company") and certain of its wholly owned subsidiaries commenced voluntary bankruptcy cases (the "Bankruptcy Cases") under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Company continues to manage its business as a debtor-in-possession. On November 1, 2002, the Company submitted to the Securities and Exchange Commissioner (the "SEC") a written request (the "Request") for permission to file monthly operating reports (the "Monthly Reports"), which it is required to file with the U.S. Bankruptcy Trustee and the Bankruptcy Court in connection with the Bankruptcy Cases, during the pendency of the Bankruptcy Cases in lieu of the reports it would otherwise file as required by the Securities Exchange Act of 1934, as amended. The Company submitted to the SEC a written supplement to the Request on November 14, 2002. The Company's Monthly Report for December was filed by the Company with the Bankruptcy Court on January 21, 2003, and is filed herewith as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits:
Exhibit No. Description ----------- ----------- 99.1 Monthly Operating Report filed by the Company with the United States Bankruptcy Court for the District of Delaware on January 21, 2003.
FORWARD LOOKING STATEMENTS Except for historical information, this Form 8-K contains certain forward-looking statements that involve risk and uncertainties, which may cause actual results to differ materially from the statements made including market potential, regulatory clearances, business growth, and other risks listed from time to time in the Company's Securities and Exchange Commission (SEC) filings. These forward-looking statements represent the Company's judgment, as of the date of this release, and the Company disclaims any intent or obligation to update these forward-looking statements. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HIGHLANDS INSURANCE GROUP, INC. Dated: January 28, 2003 By: /s/ Stephen L. Kibblehouse ------------------------------- Stephen L. Kibblehouse, Chief Executive Officer INDEX TO EXHIBITS
Exhibit No. Description ----------- ----------- 99.1 Monthly Operating Report filed by the Company with the United States Bankruptcy Court for the District of Delaware on January 21, 2002.
EX-99.1 3 w82876exv99w1.txt MONTHLY OPERATING REPORT FILED BY THE COMPANY Exhibit 99.1 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE IN RE Highlands Insurance Group, Inc. et al. CASE NO. 02-13196 through 02-13201 REPORTING PERIOD: 12/31/02 MONTHLY OPERATING REPORT FILE WITH COURT AND SUBMIT COPY TO UNITED STATES TRUSTEE WITHIN 20 DAYS AFTER END OF MONTH Submit copy of report to any official committee appointed in the case
DOCUMENT EXPLANATION REQUIRED DOCUMENTS FORM NO. ATTACHED ATTACHED Schedule of Cash Receipts and Disbursements MOR-1 X Bank Reconciliation (or copies of debtor's bank reconciliations) MOR-1 (CON'T) X Copies of bank statements X Cash disbursements journals Statement of Operations MOR-2 X Balance Sheet MOR-3 X Status of Postpetition Taxes MOR-4 X Copies of IRS Form 6123 or payment receipt Copies of tax returns filed during reporting period Summary of Unpaid Postpetition Debts MOR-4 X Listing of aged accounts payable Accounts Receivable Reconciliation and Aging MOR-5 X Debtor Questionnaire MOR-5 X
I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief. - -------------------------------------- ------------------------------------ Signature of Debtor Date - -------------------------------------- ------------------------------------ Signature of Joint Debtor Date /s/ Stephen L. Kibblehouse 1/20/03 - -------------------------------------- ------------------------------------ Signature of Authorized Individual* Date Chief Executive Officer Stephen L. Kibblehouse and General Counsel - -------------------------------------- ------------------------------------ Printed Name of Authorized Individual Title of Authorized Individual *Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company. IN RE HIGHLANDS INSURANCE GROUP, INC ET AL. CASE NO. 02-13196 THROUGH 02-13201 REPORTING PERIOD: 12/31/2002 SCHEDULE OF CASH RECEIPTS AND DISBURSMENTS
BANK ACCOUNTS Operating Payables Money Market Money Market Payables Operating 9102663029 1014315825 4484882 AM1P 3752021910 6200064400 Chase-HIGI PNC-HIGI Federated-HIGI State Street-HIGI BofAmer-HIGI Citizens-HIGI CASH BEGINNING OF MONTH 91,080 8,075 99,670 2 50,024 0 RECEIPTS Cash Sales -- -- -- -- -- -- Accounts Receivable -- -- -- -- -- -- Loans & Advances -- -- -- -- -- -- Sales Of Assets -- -- -- -- -- -- Other (Includes Interest) -- 87 Transfers (From DIP ACCTS) -- -- -- 103,124 TOTAL RECEIPTS 0 0 0 0 0 103,211 DISBURSEMENTS Net Payroll -- -- -- -- -- -- Payroll Taxes -- -- -- -- -- -- Sales, Use & Other Taxes -- -- -- -- -- -- Inventory Purchases -- -- -- -- -- -- Secured/Rental/Leases -- -- -- -- -- -- Insurance -- -- -- -- -- -- Administrative & Selling -- -- -- -- 6,200 -- Selling -- -- -- -- -- -- Other (Attach List)* -- 10 -- -- 49 25 *Bank Fees Owner Draw -- -- -- -- -- -- Transfers (TO DIP ACCOUNTS) -- 3,452 99,670 2 -- -- Professional Fees -- -- -- -- 6,366 -- U.S. Trustee Quarterly Fees -- -- -- -- -- -- Court Costs -- -- -- -- -- -- TOTAL DISBURSEMENTS 0 3,462 99,670 2 12,615 25 NET CASH FLOW 0 (3,462) (99,670) (2) (12,615) 103,186 Receipts Less Disbursements CASH-END OF MONTH 91,080 4,613 0 0 37,409 103,186
CURRENT MONTH CUMULATIVE FILING TO DATE Operating Operating Operating Actual Projected Actual Projected 3750487802 6200064419 20569113 BofA-HCSS Citizens-HCSS BankOne-NNHC CASH BEGINNING OF MONTH 176,014 0 28,894 453,759 448,641 453,759 448,641 RECEIPTS Cash Sales -- -- -- -- -- -- Accounts Receivable -- -- -- -- -- -- Loans & Advances -- -- -- -- -- -- Sales Of Assets -- -- -- -- -- -- Other (Includes Interest) -- 87 -- 501 -- Transfers (From DIP ACCTS) -- 90,000 -- 193,124 -- 333,264 -- TOTAL RECEIPTS 0 90,000 0 193,211 0 333,765 0 DISBURSEMENTS Net Payroll -- -- -- -- -- -- -- Payroll Taxes -- -- -- -- -- -- -- Sales, Use & Other Taxes -- -- -- -- -- -- -- Inventory Purchases -- -- -- -- -- -- -- Secured/Rental/Leases -- -- -- -- -- -- -- Insurance -- -- -- -- -- -- -- Administrative & Selling -- -- -- 6,200 1,000 6,200 2,000 Selling -- -- -- -- -- Other (Attach List)* -- 11 -- 95 10,000 95 13,704 *Bank Fees Owner Draw -- -- -- -- -- -- -- Transfers (TO DIP ACCOUNTS) 90,000 -- -- 193,124 -- 333,264 -- Professional Fees -- -- -- 6,366 20,000 6,366 20,000 U.S. Trustee Quarterly Fees -- -- -- -- -- -- -- Court Costs -- -- -- -- 5,000 -- 5,000 TOTAL DISBURSEMENTS 90,000 11 0 205,785 36,000 345,925 40,704 NET CASH FLOW (90,000) 89,989 0 (12,574) (36,000) (12,160) (40,704) Receipts Less Disbursements CASH-END OF MONTH 86,014 89,989 28,894 441,185 412,641 441,599 407,937
DISBURSMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH ACTUAL COLUMN) TOTAL DISBURSMENTS $205,785 LESS:TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS $193,124 PLUS:ESTATE DISBURSMENTS MADE BY OUTSIDE SOURCES (from escrow accounts) $ 0 TOTAL DISBURSMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES $ 12,661
Highlands Insurance Group, Inc. 31-Dec-02
Operating Payables Money Market Money Market Payables Operating 9102663029 1014315825 4484882 AM1P 3752021910 6200064400 Chase PNC Federated State Street Bank Of America Citizens Bank Balance Per Books 91,080.02 4,612.66 -- -- 37,409.20 103,186.11 Bank Balance 91,080.02 -- -- -- 38,897.80 103,186.11 (+) Deposits in Transit 4,612.66 (-) Outstanding Checks (1,488.60) Other (See Below) Adjusted Bank Balance 91,080.02 4,612.66 -- -- 37,409.20 103,186.11 Deposits in Transit ck#1005 Checks Outstanding 1,488.60 Other Total Other
Highlands Claims and Safety 31-Dec-02
Operating Operating 3750487802 6200064419 Bof A Citizens Balance Per Books 86,014.03 89,989.00 Bank Balance 86,039.03 89,989.00 (+) Deposits in Transit (-) Outstanding Checks (25.00) Other (See Below) Adjusted Bank Balance 86,014.03 89,989.00 Deposits in Transit Checks Outstanding Ck 1092 issued 12/06/01 25.00 Other Total Other
Northwestern National Holding Company 31-Dec-02
Operating 20569113 Bank One Balance Per Books 28,894.04 Bank Balance 28,894.04 (+) Deposits in Transit (-) Outstanding Checks -- Other (See Below) Adjusted Bank Balance 28,894.04 Deposits in Transit Checks Outstanding Other Total Other
Case No. Reporting Period 11/30/2002
STATEMENT OF OPERATIONS (Income Statement) Case: 02-13198 Case: 02-13196 NORTHWESTERN NATIONAL HIGHLANDS INSURANCE HOLDING COMPANY, INC. GROUP, INC REVENUES Cumulative Cumulative Month Filing to Date Month Filing to Date Gross Revenues Less: Returns and Allowances Net Revenue 0 0 0 0 COST OF GOODS SOLD Beginning Inventory Add: Purchases Add: Cost of Labor Add: Other Cost (attach schedule) Less: Ending Inventory Cost of Goods Sold 0 0 0 0 Gross Profit 0 0 0 0 OPERATING EXPENSES Insider Compensation * Insurance (18,682) (37,364) Management Fees/Bonuses Taxes - Other Other (attach schedule) (1,489) (12,566) Total Operating Expenses Before Depreciation Depreciation/Depletion/Amortization Net Profit (Loss) Before Other Income & Expenses 0 0 (20,171) (49,930) OTHER INCOME AND EXPENSES Other Income (attach schedule) 85 85 Interest Expense (822,726) (1,618,913) Other Expense (attach schedule) 0 0 Net Profit (Loss) Before Reorganization Items 0 0 (842,812) (1,668,758) REORGANIZATION ITEMS Professional Fees (52,370) (52,370) U.S. Trustee Quarterly Fees Interest Earned on Accumulated Cash from Chapter 11 (see continuation sheet) Gain (Loss) from Sale of Equipment Other Reorganization Expenses (attach schedule) Total Reorganization Expenses 0 0 0 (52,370) Income Taxes Net Profit (Loss) 0 0 (842,812) (1,721,128) * "Insider" is defined in 11 U.S.C. Section 101 (31)
STATEMENT OF OPERATIONS (Income Statement) Case: 02-13201 Case: 02-13200 Case: 02-13199 HIGHLANDS HIGHLANDS CLAIMS AND AMERICAN RELIANCE INC. SERVICE CORPORATION SAFETY SERVICES, INC REVENUES Cumulative Cumulative Cumulative Month Filing to Date Month Filing to Date Month Filing to Date Gross Revenues Less: Returns and Allowances Net Revenue 0 0 0 0 0 0 COST OF GOODS SOLD Beginning Inventory Add: Purchases Add: Cost of Labor Add: Other Cost (attach schedule) Less: Ending Inventory Cost of Goods Sold 0 0 0 0 0 0 Gross Profit 0 0 0 0 0 0 OPERATING EXPENSES Insider Compensation * Insurance Management Fees/Bonuses Taxes - Other Other (attach schedule) Total Operating Expenses Before Depreciation Depreciation/Depletion/Amortization Net Profit (Loss) Before Other Income & Expenses 0 0 0 0 0 0 OTHER INCOME AND EXPENSES Other Income (attach schedule) 1,584 1,715 Interest Expense Other Expense (attach schedule) 0 0 (1,425) (1,543) Net Profit (Loss) Before Reorganization Items 0 0 159 172 0 0 REORGANIZATION ITEMS Professional Fees U.S. Trustee Quarterly Fees Interest Earned on Accumulated Cash from Chapter 11 (see continuation sheet) Gain (Loss) from Sale of Equipment Other Reorganization Expenses (attach schedule) Total Reorganization Expenses 0 0 0 0 0 0 Income Taxes Net Profit (Loss) 0 0 159 172 0 0 * "Insider" is defined in 11 U.S.C. Section 101 (31)
STATEMENT OF OPERATIONS (Income Statement) Case: 02-13197 Highlands Holding Company CONSOLIDATING REVENUES Cumulative Cumulative Month Filing to Date Month Filing to Date Gross Revenues 0 0 Less: Returns and Allowances 0 0 Net Revenue 0 0 0 0 COST OF GOODS SOLD Beginning Inventory 0 0 Add: Purchases 0 0 Add: Cost of Labor 0 0 Add: Other Cost (attach schedule) 0 0 Less: Ending Inventory 0 0 Cost of Goods Sold 0 0 0 0 Gross Profit 0 0 0 0 OPERATING EXPENSES Insider Compensation * 0 0 Insurance (18,682) (37,364) Management Fees/Bonuses 0 0 Taxes - Other 0 0 Other (attach schedule) (1,489) (12,566) Total Operating Expenses Before Depreciation 0 0 Depreciation/Depletion/Amortization 0 0 Net Profit (Loss) Before Other Income & Expenses 0 0 (20,171) (49,930) OTHER INCOME AND EXPENSES Other Income (attach schedule) 1,669 1,800 Interest Expense (822,726) (1,618,913) Other Expense (attach schedule) 0 0 (1,425) (1,543) Net Profit (Loss) Before Reorganization Items 0 0 (842,653) (1,668,586) REORGANIZATION ITEMS Professional Fees (52,370) (52,370) U.S. Trustee Quarterly Fees 0 0 Interest Earned on Accumulated Cash from Chapter 11 (see continuation sheet) 0 0 Gain (Loss) from Sale of Equipment 0 0 Other Reorganization Expenses (attach schedule) 0 0 Total Reorganization Expenses 0 0 (52,370) (52,370) Income Taxes Net Profit (Loss) 0 0 (947,394) (1,773,326) * "Insider" is defined in 11 U.S.C. Section 101 (31)
Case: 02-13198 Case 02-13196 Case: 02-13201 Case: 02-13200 NORTHWESTERN NATIONAL HIGHLANDS INSURANCE HIGHLANDS HIGHLANDS CLAIMS AND HOLDING COMPANY, INC. GROUP, INC. SERVICE CORPORATION SAFETY SERVICES, INC. BREAKDOWN OF "OTHER" CATEGORY CUMULATIVE CUMULATIVE CUMULATIVE CUMULATIVE MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE OTHER COSTS 0 0 0 0 0 0 0 0 OTHER OPERATIONAL EXPENSES Directors Fees (6,366) Mellon investors services (4,711) Printing fees (1,489) (1,489) 0 0 (1,489) (12,566) 0 0 0 0 0 0 (1,489) 12,566 0 0 0 0 OTHER INCOME Claims service fees Interest income - Federated 85 85 1,584 1,715 OTHER EXPENSES Claims service expense (1,425) (1,543)
Case: 02-13199 Case: 02-13197 AMERICAN HIGHLANDS RELIANCE INC. HOLDING COMPANY CONSOLIDATING BREAKDOWN OF "OTHER" CATEGORY CUMULATIVE CUMULATIVE CUMULATIVE MONTH FILING TO DATE MONTH FILING TO DATE MONTH FILING TO DATE OTHER COSTS 0 0 0 0 0 0 OTHER OPERATIONAL EXPENSES Directors Fees Mellon investors services Printing fees 0 0 0 0 0 0 0 0 0 0 0 0 OTHER INCOME Claims service fees Interest income - Federated OTHER EXPENSES Claims service expense
CONSOLIDATING BALANCE SHEET The Balance Sheet is to be completed on an accrual basis only. Pre-petition liabilities must be classified separately from postpetition obligations. Reporting Date 12/31/2002
CASE: 02-13198 CASE: 02-13196 CASE: 02-13201 -------------------------------- -------------------------------- -------------------------------- Northwestern National Holding Company, Inc. Highlands Insurance Group, Inc. Highlands Service Corporation Book Value at Book Value at Book Value at End of Current Book Value on End of Current Book Value on End of Current Book Value on Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date ---------------- ------------- ---------------- ------------- ---------------- ------------- ASSETS CURRENT ASSETS Unrestricted Cash and Equivalents Restricted Cash and Cash Equivalents (see continuation sheet) 28,894 28,894 236,369 248,567 Accounts Receivable (Net) 34,614 34,614 Notes Receivable Inventories Prepaid Legal Expenses 45,920 98,290 Professional Retainers Other Current Assets (attach schedule) 1,983,370 1,983,370 (22,704,990) (22,667,626) TOTAL CURRENT ASSETS 2,012,264 2,012,264 $ (22,422,701) $ (22,320,769) $ 34,614 $ 34,614 PROPERTY AND EQUIPMENT Real Property and Improvements Machinery and Equipment Furniture, Fixtures and Office Equipment Leasehold Improvements Vehicles Less Accumulated Depreciation TOTAL PROPERTY & EQUIPMENT -- -- $ -- $ -- $ -- $ -- OTHER ASSETS Loans to Insiders* Other Assets (attach schedule) TOTAL OTHER ASSETS -- -- $ -- $ -- $ -- $ -- --------------- -------------- --------------- -------------- --------------- -------------- TOTAL ASSETS 2,012,264 2,012,264 $ (22,422,701) $ (22,320,769) $ 34,614 $ 34,614 =============== ============== =============== ============== =============== ============== LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition) Accounts Payable -- Taxes Payable (refer to FORM MOR-4) Wages Payable Notes Payable Rent / Leases - Building/Equipment Secured Debt / Adequate Protection Payments Professional Fees Amounts Due to Insiders* Other Postpetition Liabilities (accrued interest) 1,618,914 TOTAL POSTPETITION LIABILITIES -- -- $ 1,618,914 $ -- $ -- $ -- LIABILITIES SUBJECT TO COMPROMISE (PRE-PETITION) Secured Debt 47,504,390 47,504,390 Priority Debt Unsecured Debt 1,124 1,124 75,702,166 75,701,885 23,464 23,464 TOTAL PRE-PETITION LIABILITIES 1,124 1,124 $ 123,206,556 $ 123,206,275 $ 23,464 $ 23,464 TOTAL LIABILITIES 1,124 1,124 $ 124,825,470 $ 123,206,275 $ 23,464 $ 23,464 OWNER EQUITY Capital Stock 10,000 10,000 137,181 137,181 Additional Paid-In Capital 120,543,607 120,543,607 228,871,789 228,871,789 Partner's Capital Account Owner's Equity Account Retained Earnings - Pre-Petition (118,542,467) (118,542,467) 11,150 11,150 Retained Earnings - Postpetition (388,867,037) (387,145,910) Adjustments to Owner Equity (attach schedule) 12,609,896 12,609,896 Postpetition Contributions (Distributions) (Draws) (attach schedule) NET OWNER EQUITY 2,011,140 2,011,140 $ (147,248,171) $ (145,527,044) $ 11,150 $ 11,150 --------------- -------------- --------------- -------------- --------------- -------------- TOTAL LIABILITIES AND OWNER'S EQUITY 2,012,264 2,012,264 (22,422,701) (22,320,769) 34,614 34,614 =============== ============== =============== ============== =============== ============== **Insider* is defined in 11 U.S.C. Section 101(31) -- -- (0) -- -- --
CASE: 02-13200 CASE: 02-13199 CASE: 02-13197 -------------------------------- -------------------------------- -------------------------------- Higlands Claims and Safety Services Inc. American Reliance, Inc. Highlands Holding Company Book Value at Book Value at Book Value at End of Current Book Value on End of Current Book Value on End of Current Book Value on Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date ---------------- ------------- ---------------- ------------- ---------------- ------------- ASSETS CURRENT ASSETS Unrestricted Cash and Equivalents 176,014 175,899 Restricted Cash and Cash Equivalents (see continuation sheet) Accounts Receivable (Net) 1,917 176 Notes Receivable Inventories Prepaid Legal Expenses Professional Retainers Other Current Assets (attach schedule) 3,742 3,742 2,151,856 2,151,856 (12,000,000) (12,000,000) TOTAL CURRENT ASSETS $ 181,673 $ 179,817 $ 2,151,856 $ 2,151,856 $ (12,000,000) $ (12,000,000) PROPERTY AND EQUIPMENT Real Property and Improvements Machinery and Equipment Furniture, Fixtures and Office Equipment Leasehold Improvements Vehicles Less Accumulated Depreciation TOTAL PROPERTY & EQUIPMENT $ -- $ -- $ -- $ -- $ -- $ -- OTHER ASSETS Loans to Insiders* Other Assets (attach schedule) TOTAL OTHER ASSETS $ -- $ -- $ -- $ -- $ -- $ -- --------------- -------------- --------------- -------------- --------------- -------------- TOTAL ASSETS $ 181,673 $ 179,817 $ 2,151,856 $ 2,151,856 $ (12,000,000) $ (12,000,000) =============== ============== =============== ============== =============== ============== LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition) Accounts Payable Taxes Payable (refer to FORM MOR-4) Wages Payable Notes Payable Rent / Leases - Building/Equipment Secured Debt / Adequate Protection Payments Professional Fees Amounts Due to Insiders* Other Postpetition Liabilities (accrued interest) TOTAL POSTPETITION LIABILITIES $ -- $ -- $ -- $ -- $ -- $ -- LIABILITIES SUBJECT TO COMPROMISE (PRE-PETITION) Secured Debt Priority Debt Unsecured Debt 4,684 3,000 3,470,447 3,470,447 394 394 TOTAL PRE-PETITION LIABILITIES $ 4,684 $ 3,000 $ 3,470,447 $ 3,470,447 $ 394 $ 394 TOTAL LIABILITIES $ 4,684 $ 3,000 $ 3,470,447 $ 3,470,447 $ 394 $ 394 OWNER EQUITY Capital Stock 1,000 1,000 272 272 Additional Paid-In Capital 164,095,489 164,095,489 Partner's Capital Account Owner's Equity Account Retained Earnings - Pre-Petition 175,989 175,817 (165,414,352) (165,414,352) (12,000,394) (12,000,394) Retained Earnings - Postpetition Adjustments to Owner Equity (attach schedule) Postpetition Contributions (Distributions) (Draws) (attach schedule) NET OWNER EQUITY $ 176,989 $ 176,817 $ (1,318,591) $ (1,318,591) $ (12,000,394) $ (12,000,394) --------------- -------------- --------------- -------------- --------------- -------------- TOTAL LIABILITIES AND OWNER'S EQUITY 181,673 179,817 $ 2,151,856 $ 2,151,856 $ (12,000,000) $ (12,000,000) =============== ============== =============== ============== =============== ============== **Insider* is defined in 11 U.S.C. Section 101(31) FORM MOR-3 (9/99) 0 -- -- -- -- --
-------------------------------- CONSOLIDATING Book Value at End of Current Book Value on Reporting Period Petition Date ---------------- ------------- ASSETS CURRENT ASSETS Unrestricted Cash and Equivalents 176,014 175,899 Restricted Cash and Cash Equivalents (see continuation sheet) 265,263 277,461 Accounts Receivable (Net) 36,531 34,790 Notes Receivable -- -- Inventories -- -- Prepaid Legal Expenses 45,920 98,290 Professional Retainers -- -- Other Current Assets (attach schedule) (30,566,022) (30,528,658) TOTAL CURRENT ASSETS $ (30,042,294) $ (29,942,218) PROPERTY AND EQUIPMENT Real Property and Improvements -- -- Machinery and Equipment -- -- Furniture, Fixtures and Office Equipment -- -- Leasehold Improvements -- -- Vehicles -- -- Less Accumulated Depreciation -- -- TOTAL PROPERTY & EQUIPMENT $ -- $ -- OTHER ASSETS Loans to Insiders* -- -- Other Assets (attach schedule) -- -- TOTAL OTHER ASSETS $ -- $ -- --------------- -------------- TOTAL ASSETS $ (30,042,294) $ (29,942,218) =============== ============== LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition) Accounts Payable -- -- Taxes Payable (refer to FORM MOR-4) -- -- Wages Payable -- -- Notes Payable -- -- Rent / Leases - Building/Equipment -- -- Secured Debt / Adequate Protection Payments -- -- Professional Fees -- -- Amounts Due to Insiders* -- -- Other Postpetition Liabilities (accrued interest) 1,618,914 -- TOTAL POSTPETITION LIABILITIES $ 1,618,914 $ -- LIABILITIES SUBJECT TO COMPROMISE (PRE-PETITION) Secured Debt 47,504,390 47,504,390 Priority Debt -- -- Unsecured Debt 79,202,279 79,200,314 TOTAL PRE-PETITION LIABILITIES $ 126,706,669 $ 126,704,704 TOTAL LIABILITIES $ 128,325,583 $ 126,704,704 OWNER EQUITY Capital Stock 148,453 148,453 Additional Paid-In Capital 513,510,885 513,510,885 Partner's Capital Account -- -- Owner's Equity Account -- -- Retained Earnings - Pre-Petition (295,770,074) (295,770,246) Retained Earnings - Postpetition (388,867,037) (387,145,910) Adjustments to Owner Equity (attach schedule) 12,609,896 12,609,896 Postpetition Contributions (Distributions) (Draws) (attach schedule) -- -- NET OWNER EQUITY $ (158,367,877) $ (156,646,922) --------------- -------------- TOTAL LIABILITIES AND OWNER'S EQUITY $ (30,042,294) $ (29,942,218) =============== ============== **Insider* is defined in 11 U.S.C. Section 101(31) 0 --
-------------------------------- -------------------------------- -------------------------------- Northwestern National Holding Company, Inc. Highlands Insurance Group, Inc. Highlands Service Corporation Book Value at Book Value at Book Value at End of Current Book Value on End of Current Book Value on End of Current Book Value on Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date ---------------- ------------- ---------------- ------------- ---------------- ------------- ASSETS Other Current Assets Investment in Subs 1,986,370 1,986,370 (22,723,671) (22,723,671) -- -- Prepaid Insurance 18,681 56,045 Taxes Recoverable Receivables from affiliates Other Assets
---------------- ------------- ---------------- ------------- ---------------- ------------- Book Value at Book Value at Book Value at End of Current Book Value on End of Current Book Value on End of Current Book Value on Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date ---------------- ------------- ---------------- ------------- ---------------- ------------- LIABILITIES AND OWNER EQUITY Other Pospetition Liabilities -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Adjustment to Owner Equity Treasury Stock -- -- 3,999,394 3,999,394 -- -- Deferred Comp on Restricted Stock -- 313,189 313,189 -- -- Preferred Stock -- -- (16,922,520) (16,922,520) -- -- Pospetition Contributions (Distributions) (Draws)
-------------------------------- -------------------------------- -------------------------------- Higlands Claims and Safety Services Inc. American Reliance, Inc. Highlands Holding Company Book Value at Book Value at Book Value at End of Current Book Value on End of Current Book Value on End of Current Book Value on Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date ---------------- ------------- ---------------- ------------- ---------------- ------------- ASSETS Other Current Assets Investment in Subs -- -- 2,074,519 2,074,519 (12,000,394) (12,000,394) Prepaid Insurance Taxes Recoverable 3,742 3,742 Receivables from affiliates 77,337 77,337 Other Assets
Book Value at Book Value at Book Value at End of Current Book Value on End of Current Book Value on End of Current Book Value on Reporting Period Petition Date Reporting Period Petition Date Reporting Period Petition Date ---------------- ------------- ---------------- ------------- ---------------- ------------- LIABILITIES AND OWNER EQUITY Other Pospetition Liabilities -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Adjustment to Owner Equity Treasury Stock -- -- -- -- -- -- Deferred Comp on Restricted Stock -- -- -- -- -- -- Preferred Stock -- -- -- -- -- -- Pospetition Contributions (Distributions) (Draws)
-------------------------------- CONSOLIDATING Book Value at End of Current Book Value on Reporting Period Petition Date ---------------- ------------- ASSETS Other Current Assets Investment in Subs (30,663,176) (30,663,176) Prepaid Insurance 18,681 56,045 Taxes Recoverable 3,742 3,742 Receivables from affiliates 77,337 77,337 Other Assets -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
Book Value at End of Current Book Value on Reporting Period Petition Date ---------------- ------------- LIABILITIES AND OWNER EQUITY Other Pospetition Liabilities -- -- -- -- -- -- Adjustment to Owner Equity Treasury Stock 3,999,394 3,999,394 Deferred Comp on Restricted Stock 313,189 313,189 Preferred Stock (16,922,520) (16,922,520) Pospetition Contributions (Distributions) (Draws)
Restricted Cash: cash that is restricted for a specific use and not available to fund operations. Typically, restricted cash is segregated into a separate account, such as an escrow account. IN RE Highlands Insurance Group, Inc. et al. CASE NO. 02-13196 through 02-13201 -------------------------------------- ------------------------- Debtor REPORTING PERIOD 12/31/02 ---------------- STATUS OF POSTPETITION TAXES The beginning tax liability should be the ending liability from the prior month or, if this is the first report, the amount should be zero Attach photocopies of IRS Form 6123 or payment receipt to verify payment or deposit of federal payroll taxes Attach photocopies of any tax returns filed during the reporting period
Beginning Amount Ending Tax Withheld or Amount Date Check No. Tax Liability Accrued Paid Paid or EFT Liability --------- ----------- ---------- ---------- ----------- --------- FEDERAL Withholding FICA-Employee FICA-Employer Unemployment Income Other: Total Federal Taxes -0- -0- STATE AND LOCAL Withholding Sales Excise UNEMPLOYMENT REAL PROPERTY PERSONAL PROPERTY OTHER: ========= =========== ========== ========== =========== ========= TOTAL STATE AND LOCAL -0- -0- ========= =========== ========== ========== =========== ========= TOTAL TAXES -0- -0- ========= =========== ========== ========== =========== =========
*Debtors have no employees SUMMARY OF UNPAID POSTPETITION DEBTS ATTACH AGED LISTING OF ACCOUNTS PAYABLE.
NUMBER OF DAYS PAST DUE --------------------------------------------------------------------------- Current 0-30 31-60 61-90 Over 90 Total ----------- -------- --------- --------- ----------- ----------- Accounts Payable Wages Payable Taxes Payable Rent/Leases-Building Rent/Leases-Equipment Secured Debt/Adequate Protection Payments Professional Fees Amounts Due to Insiders* (Directors Fees) Other: (Accrued Interest) 822,726 796,188 1,618,914 Other: =========== ======== ========= ========= =========== =========== TOTAL POSTPETITION DEBTS 822,726 796,188 1,618,914 =========== ======== ========= ========= =========== ===========
EXPLAIN HOW AND WHEN THE DEBTOR INTENDS TO PAY ANY PAST-DUE POSTPETITION DEBTS. Liabilities, other than accrued interest, will be paid from remaining cash of Debtor. Accrued interest will not be paid currently. * "Insider" is defined in 11 U.S.C. Section 101(31). FORM MOR-4 (9/99) IN RE Highlands Insurance Group, Inc. et al. CASE NO. 02-13196 through 02-13201 -------------------------------------- ------------------------- Debtor REPORTING PERIOD 12/31/02 ----------------- ACCOUNTS RECEIVABLE RECONCILIATION AND AGING
ACCOUNTS RECEIVABLE RECONCILIATION AMOUNT - ---------------------------------- ------ Total Accounts Receivable at the beginning of the reporting period $34,817 + Amounts billed during the period 1,714 - - Amounts collected during the period Total Accounts Receivable at the end of the reporting period 36,531
ACCOUNTS RECEIVABLE AGING AMOUNT - ---------------------------------- ------ 0 - 30 days old 1,714 31 - 60 days old 27 61 - 90 days old 176 91+ days old 34,614 TOTAL ACCOUNTS RECEIVABLE 36,531 AMOUNT CONSIDERED UNCOLLECTIBLE (BAD DEBT) -- ACCOUNTS RECEIVABLE (NET) 36,531
DEBTOR QUESTIONNAIRE
MUST BE COMPLETED EACH MONTH YES NO - ---------------------------- --- --- 1. Have any assets been sold or transferred outside X the normal course of business this reporting period? If yes, provide an explanation below. 2. Have any funds been disbursed from any account other X than a debtor in possession account this reporting period? If yes, provide an explanation below. 3. Have all postpetition tax returns been timely filed? X If no, provide an explanation below. 4. Are workers compensation, general liability and X other necessary insurance coverages in effect? If no, provide an explanation below.
FORM MOR-5 (9/99) -----END PRIVACY-ENHANCED MESSAGE-----