EX-99.1 2 oct07.htm OCTOBER 2007 oct07.htm
 

 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
         
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.
    
         
         
 
         
REQUIRED DOCUMENTS
Form No.
Document
Complete
Explanation
Attached
Affidavit/Supplement
Attached
Schedule of Cash Receipts and Disbursements
 MOR-1
 
    
   Bank Reconciliation (or copies of Debtor's bank reconciliations)
 MOR-1a
x
    
   Schedule of Professional Fees Paid
 MOR-1b
x
 
  
   Copies of bank statements
        
   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
 MOR-4
x
    
Accounts Receivable reconciliation and Aging
 MOR-5
x
    
Debtor Questionnaire
 MOR-5
x
    
 
MOR
 
I declare under penalty of perjury (28 U.S.C. Section 1746) that the information contained in this monthly operating report (including attached schedules) is true and correct to the best of my knowledge, information, and belief.
 
debtor signature
  
3/25/08
 
Signature of Joint Debtor
  
Date
     
     
     
Signature of Joint Debtor
  
Date
     
     
     
Signature of Authorized Individual
  
Date
     
     
     
Printed Name of Authorized Individual
  
Date
     
 
 
Page 1 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
NEW ENGLAND AUDIO CO., INC.
SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
 
Amounts reported should be per the Debtor's books, not the bank statement. The beginning cash should be the ending cash from the prior month or, if this is the first report, the amount should be the balance on the date the petition was filed.  The amounts reported in the "CURRENT MONTH - ACTUAL" column must equal the sum of the four bank account columns. The amounts reported in the "PROJECTED" columns should be taken from the SMALL BUSINESS INITIAL REPORT (FORM IR-1). Attach copies of the bank statements and the cash disbursements journal.  The total disbursements listed in the disbursements journal must equal the total disbursements reported on this page.  A bank reconciliation must be attached for each account. [See MOR-1 (CON'T)]
 
 
                 
 
BANK ACCOUNT
  
CURRENT MONTH
  
CUMULATIVE
 
OPER
PAYROLL
TAX
OTHER
  
ACTUAL
  
ACTUAL
CASH BEGINNING OF MONTH
     $      6,229,113 
$                  -
$                               -
     $                          -
  
                            $           6,229,113 
  
              $        1,751,362
RECEIPTS
                
                 
CASH SALES
          - 
                               -
                               -
                               -
  
                          
  
     29,728,211
ACCOUNTS RECEIVABLE
2,963,440
                               -
                               -
                               -
  
                            2,963,440
  
         8,937,651
LOANS AND ADVANCES
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
SALE OF ASSETS
              -
                               -
                               -
                               -
  
                              
  
    8,011,316
OTHER (SEE BELOW)
                -
                               -
                               -
                               -
  
                              
  
            970,620
TRANSFERS (FROM DIP ACCTS)
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
                 
TOTAL RECEIPTS
         2,963,440
                               -
                               -
                               -
  
                          2,963,440
  
   47,647,798
DISBURSEMENTS
                
AP CHECK REGISTER
           (119,479)
                               -
                               -
                               -
  
                          (119,479)
  
    (7,745,729)
WIRES
    (2,229,915)
                               -
                               -
                               -
  
                          (2,229,915)
  
    (21,277,684)
Other
      
                               -
                               -
                               -
  
                        
  
       (12,060,557)
                 
PROFESSIONAL FEES
                               (846,690)
                               -
                               -
                               -
  
                                                  (846,690)
  
                               (2,316,741)
U.S. TRUSTEE QUARTERLY FEES
                               -
                               -
                               -
                               -
  
                                                 -
  
                             (2,000)
COURT COSTS
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
                 
TOTAL DISBURSEMENTS
        (3,196,084)
                               -
                               -
                               -
  
                        (3,196,084)
  
    (43,402,711)
                 
NET CASH FLOW
            (232,644)
                               -
                               -
                               -
  
                          (232,644)
  
         4,245,087
(RECEIPTS LESS DISBURSEMENTS)
                
                 
CASH - END OF MONTH
             $        5,996,469
                               -
                               -
                               -
  
                         $        5,996,469 
  
           $        5,996,469 
     
* COMPENSATION TO SOLE PROPRIETORS FOR SERVICES RENDERED TO BANKRUPTCY ESTATE
    
 
THE FOLLOWING SECTION MUST BE COMPLETED
                 
TOTAL DISBURSEMENTS
              
         $        (3,196,084)
   LESS: TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS
          
                               -
   PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. from escrow account)
      
                               -
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES
      
         $        (3,196,084)
                 
               
FORM MOR-1
 
Note:
All of the Debtors disbursement accounts are in the name of New England Audio Co, Inc except for the manual payroll account is in the name of Tweeter Home Entertainment Group, Inc. Disbursements for both debtors are summarized herein.

 
Page 2 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
   
   
In Re:
Tweeter Home Entertainment Group. Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
TWEETER HOME ENTERTAINMENT GROUP, INC.
SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
 
Amounts reported should be per the Debtor's books, not the bank statement.  The beginning cash should be the ending cash from the prior month or, if this is the first report, the amount should be the balance on the date the petition was filed.  The amounts reported in the "CURRENT MONTH - ACTUAL" column must equal the sum of the four bank account columns.  The amounts reported in the "PROJECTED" columns should be taken from the SMALL BUSINESS INITIAL REPORT (FORM IR-1). Attach copies of the bank statements and the cash disbursements journal.  The total disbursements listed in the disbursements journal must equal the total disbursements reported on this page.  A bank reconciliation must be attached for each account. [See MOR-1 (CON'T)]
                 
 
BANK ACCOUNT
  
CURRENT MONTH
  
CUMULATIVE
 
OPER
PAYROLL
TAX
OTHER
  
ACTUAL
  
ACTUAL
CASH BEGINNING OF MONTH
$                               -
$                               -
$                               -
$                               -
  
                        $                               -
  
                  $        151,056
RECEIPTS
                
                 
CASH SALES
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
ACCOUNTS RECEIVABLE
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
LOANS AND ADVANCES
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
SALE OF ASSETS
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
OTHER (ATTACH LIST)
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
TRANSFERS (FROM DIP ACCTS)
                               -
            
                               -
                               -
  
                               
  
              5,125,286
                 
TOTAL RECEIPTS
                               -
             
                               -
                               -
  
                               
  
              5,125,286
DISBURSEMENTS
                
PAYROLL ISSUED
                               -
          
                               -
                               -
  
                             
  
           (5,276,342)
                 
PROFESSIONAL FEES
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
U.S. TRUSTEE QUARTERLY FEES
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
COURT COSTS
                               -
                               -
                               -
                               -
  
                                                 -
  
                               -
                 
TOTAL DISBURSEMENTS
  
          
                               -
                               -
  
                             
  
           (5,276,342)
                 
NET CASH FLOW
                               -
             
                               -
                               -
  
                                
  
                (151,056)
(RECEIPTS LESS DISBURSEMENTS)
                
                 
CASH - END OF MONTH
$                               -
   $                               -
$                               -
$                               -
  
           $                               -
  
$                               -
     
* COMPENSATION TO SOLE PROPRIETORS FOR SERVICES RENDERED TO BANKRUPTCY ESTATE
    
                 
THE FOLLOWING SECTION MUST BE COMPLETED
                 
TOTAL DISBURSEMENTS
              
       $                               -
LESS: TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS
          
                               -
PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. from escrow account)
      
                               -
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES
      
    $                               -
                 
               
FORM MOR-1
 
Page 3 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
BANK RECONCILIATIONS
  
Continuation Sheet for MOR-1
  
A bank reconciliation must be included for each bank account.
  
The Debtor's bank reconciliation may be submitted for this page.
  
   
 
Operating
Account
Professional Fee Reserve Account
Deposit
Account
Polk Reserve Account
Utility Reserve Account
Escrow Account
  
Total
 
4426430962
4426448213
4426438621
4426448242
4426448239
 4426448226  
BALANCE FOR BOOKS
$                   30,039
  $                  1,236,212
 $      3,780,217
  $                      -
 $               300,000
 $           650,000
  $        5,996,469 
               
BANK BALANCE
       (250,787)
 1,236,212   3,780,217  -
  300,000
  650,000
     5,715,642
(+) DEPOSITS IN TRANSIT (ATTACH LIST)
          
-
  
(-) OUTSTANDING CHECKS (ATTACH LIST)
(280,827)
 -
 -
 -
  -
-
       (280,827)
OTHER (ATTACH EXPLANATION)
          
 
  
ADJUSTED BANK BALANCE*
30,039
1,236,212
     3,780,217
  - 300,000
650,000
  5,996,469
*Adjusted bank balance must equal
              
   balance per books
              
 
Outstanding Checks as of 10/31/2007
 
Ch.#
Amount
  
Ch.#
Amount
  
Ch.#
Amount
  
Ch.#
Amount
600019
$        172.72
  
600441
$         62.99
  
801171
$        9,438.00
  
801761
$           765.64
600031
25.00
  
600456
500.00
  
801203
4.42
  
600890
162.10
600044
4.26
  
600517
104.02
  
801210
70.00
  
600893
217.59
600103
112.59
  
600520
84.67
  
801353
100.27
  
600897
111.21
600147
51.18
  
600581
310.80
  
801365
5.02
  
600899
202.65
600163
39.00
  
600598
255.36
  
801367
9.03
  
600900
125.00
600186
73.50
  
600749
1,419.67
  
801394
4.21
  
600902
98.64
600204
121.31
  
600775
15.36
  
801422
7.89
  
600903
213.09
600211
110.98
  
600791
175.00
  
801483
60.95
  
600905
2,727.48
600258
10.60
  
800032
7.58
  
801522
1,171.83
  
600907
4,451.89
600262
7.20
  
800096
90.14
  
801535
40.00
  
600908
750.00
600266
106.00
  
800105
50.00
  
801564
62.27
  
801783
50.00
600286
50.00
  
800110
7.00
  
801577
314.52
  
801827
25.00
600304
102.90
  
800188
199.43
  
801594
9,850.00
  
801830
75.00
600343
1,088.46
  
800257
94.05
  
801602
36.20
  
801856
39.00
600367
833.24
  
800562
50.00
  
801613
50.00
  
801862
141,220.00
600396
237.44
  
800709
118.36
  
600832
427.49
  
801864
66.94
600404
78.77
  
800842
50.00
  
600842
115.00
  
801865
783.61
600408
1,112.97
  
800848
7.02
  
600846
455.80
  
801867
133.06
600413
469.14
  
800892
96,615.00
  
600856
99.00
      
600417
1,169.95
  
801160
55.30
  
801677
38.00
      
                     
                 
Total
$      280,826.76
                     
 
Page 4 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES PAID
This schedule is to include all retained professional payments from case inception to current month.

PAYEE
PERIOD
COVERED
AMOUNT
APPROVED (1)
WIRE/CHECK
AMOUNT PAID
YEAR-TO-DATE (2)
     
NUMBER
DATE
FEES
EXPENSES
FEES
EXPENSES
Skadden, Arps, Slate Meagher & Flom LLP
July '07
$        387,761.80
Wire
10/4/2007
 $         349,204.60
 $     38,557.20
 $  820,856.25
 $      50,021.09
                 
Otterbourg, Steindler, Houston & Rosen
June '07
97,481.94
 Check #801778
10/4/2007
96,398.00
            1,083.94
      288,297.50
            3,710.95
 
July '07
136,867.01
 Check #801778
10/4/2007
134,240.00
            2,627.01
    
                 
Pachulski Stang Ziehl & Jones LLO
June '07
36,104.18
 Check #801779
10/4/2007
35,261.20
               842.98
         44,076.50
               842.98
                 
BDO Seidman, LLP
June 22 - July 31 '07
188,475.40
 Wire
10/4/2007
185,448.40
           3,027.00
        231,810.50
           3,027.00
                 
                 
(1)  Amount approved is based on 80% of Fees and 100% of Expenses
          
FORM MOR-1b
(2) Amount approved is based on 100% of Fees and 100% of Expenses
            
 
 
 
Page 5 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
   
STATEMENT OF OPERATIONS
  
(Income Statement)
  
             
The Statement of Operations is to be prepared on an accrual basis. The accrual basis of accounting recognized revenue when it is realized and expenses when they are incurred, regardless of when cash is actually received or paid.
  
             
   
10/1 - 10/31
    
Cumulative
Filing to Date
  
             
             
Revenue
   $ -     $ 29,703,635  
Cost of Goods Sold
     -       20,913,642  
Gross Profit
     -       8,789,994  
                 
Controllable Expenses
     -       8,143,441  
Non-Controllable Expenses
     -       4,014,958  
Total Operating Expenses
     -       12,158,399  
Operating Income
     -       (3,368,405 )
Other Income / Expense
     (527,397 )     1,358,979  
Loss on Transaction
     -       32,813,636  
Earnings before Tax
     527,397       (37,541,021 )
Taxes
     -       -  
Net Income
   $ 527,397     $ (37,541,021 )
                 
                 
* "Insider" is defined in 11 U.S.C. Section 101(31).
                
           
FORM MOR-2
  
                 
 
Note
The Debtors keep consolidated books and records. To provide Statement of Operations by Debtor would be unduly burdensome and time consuming.
 
Page 6 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group. Inc, et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
       
The Balance Sheet is to be completed on an accrual basis only. Pre-petition liabilities must be classified separately from postpetition obligations.
  
 
       
BALANCE SHEET
  
31-Oct-07
  
       
Current assets
      
Cash and cash equivalents
   $ 5,996,469  
Accounts receivable
     -  
Inventory
     -  
Deferred tax assets
     -  
Prepaid expenses and other current assets
      779,009  
Total current assets
     6,775,478  
         
Property and equipment
     -  
Long term investments
     -  
Intangible assets - net
     -  
Other assets
     -  
Goodwill
     -  
Total Assets
   $ 6,775,478  
         
Liabilities not Subject to Compromise (Postpetition)
        
Current portion of long-term debt
   $ -  
    Escrow     650,000   
Total Accounts Payable
       2,636,840  
Total Postpetition Liabilities
     3,286,840  
         
Liabilities Subject to Compromise (Pre-Petition)
        
         
Deferred Consideration
     -  
Accrued Expenses
     -  
Customer Deposits
     -  
Pre-petition A/P
     32,536,235  
Total Pre-Petition Liabilities
     32,536,235  
         
Secured Bank Debt
     -  
         
Other long-term liabilities
        
Accrued income taxes
     951,185  
LT restructuring & discontinued store reserve
     -  
Rent Related Accruals
     -  
   Total other long-term liabilities
     951,185  
   Total liabilities
      36,774,260  
         
Total Stockholder's Equity
     (29,998,781)  
   Total liabilities and stockholder's equity
   $  6,775,478  
         
         
   
FORM MOR-3
  
         
 
Note
The Debtors keep consolidated books and records. To provide Balance Sheet by Debtor would be unduly burdensome and time consuming.
 
Page 7 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
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.
                 
 
FEDERAL
  
Tax
Liability
    
Amount
Withheld or
Accrued
    
Amount
Paid
    
Tax
Liability
  
                         
Withholding
     -       -       -       -  
FICA-Employee
     -       -       -       -  
FICA-Employer
     -       -       -       -  
Unemployment
     -       -       -       -  
Income
     -       -       -       -  
Other
     -       -       -       -  
Total Federal Taxes
     -       -       -       -  
State and Local
                                
Withholding
     -       -       -       -  
Sales
     -       -       -          
Excise
     -       -       -       -  
Unemployment
     -       -       -       -  
Real Property
     -       -       -       -  
Personal Property
     -       -       -       -  
Other
     -       -       -       -  
Total State and Local
     -       -       -       -  
Total Taxes
     -       -       -       -  
                                 
 
                               
                               
SUMMARY OF UNPAID POSTPETITION DEBTS
                               
Attach aged listing of accounts payable
                              
                               
Accounts Payable Aging
    
0-30
      
31-60
      
61-90
    
Over 90
    
Total
  
Total Accounts Payable
   $ (2,636,840 )    $ -     $ -     $       $ -  
                                         
Explain how and when the Debtor intends to pay any post-due postpetition debts.
                          
* "Insider" is defined in 11 U.S.C. Section 101(31).
                                  
                           
FORM MOR-4
    
 
Page 8 of 9
 
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

   
   
In Re:
Tweeter Home Entertainment Group, Inc., et al.
Debtors
Chapter 11
Case Number: 07-10787 (PJW)
Jointly Administered
Hon. Peter J. Walsh
   
 
ACCOUNTS RECEIVABLE RECONCILIATION AND AGING
  
                               
Accounts Receivable Aging
    
0-30
      
31-60
      
61-90
    
Over 90
    
Total
  
Total Accounts Receivable
   $ -       -       -       -       -  
                                         
                                         
                                         
 
DEBTOR QUESTIONNAIRE
               
Must be completed each month
        
Yes
No
1.
Have any assets been sold or transferred outside the normal course of business this reporting period?  If yes, provide explanation below.
 
  X
2. 
Have any funds been disbursed from any account other than a debtor in possession account this reporting period?  If yes, provide an explanation below.
  
 X
3.
Have all postpetition tax returns been timely filed?  If no, provide an explanation below.
X
  
4.
Are workers compensation, general liability and other necessary insurance coverage's in effect?  If no, provide an explanation below.
X
  
5.
 
Has any bank account been opened during the reporting period?  If yes, provide documentation identifying the opened account(s).  If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.
    
X
 
 
 
               
              FORM MOR-5
 
Notes:
 
Account Receivable as of 7/13/07 was sold to NewCo resulting in no A/R on 10/31/07. The only receivables due to Oldco are based off of credit card holdbacks from Discover Credit Card. As of October 31, 2007, these receivables had not been received by Oldco and totaled $312,585.14.
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