EX-99.1 2 v52889exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
UNITED STATES DEPARTMENT OF JUSTICE
OFFICE OF THE UNITED STATES TRUSTEE
CENTRAL DISTRICT OF CALIFORNIA
             
In Re:
      CHAPTER 11 (BUSINESS)    
 
            
Fremont General Corporation
      Case Number:   8:08-bk-13421 
 
      Operating Report Number:   12 
 
  Debtor   For the Month Ending:   31-May-09 
I. CASH RECEIPTS AND DISBURSEMENTS
A. (GENERAL ACCOUNT — MASTER DEMAND ACCOUNT)
                 
1. TOTAL RECEIPTS PER ALL PRIOR GENERAL ACCOUNT REPORTS (1)
             18,101,895  
 
              
 
                
2. LESS: TOTAL TRANSFERS AND DISBURSEMENTS PER ALL PRIOR GENERAL ACCOUNT REPORTS
             18,096,873  
 
              
 
                
3. BEGINNING BALANCE:
             5,023  
 
              
 
                
4. RECEIPTS DURING CURRENT PERIOD:
                
Accounts Receivable — Post-filing
     —          
 
              
Accounts Receivable — Pre-filing
     —          
 
              
General Sales
     —          
 
              
Other (Specify)          Transfers from Money Market Acct
     492,000          
 
              
Other (Specify)          Refund of Professional Fees
     9,369          
 
              
TOTAL RECEIPTS THIS PERIOD:
             501,369  
 
              
 
                
5. BALANCE:
             506,393  
 
              
 
                
6. LESS: TOTAL TRANSFERS AND DISBURSEMENTS DURING CURRENT PERIOD
                
Transfers to Other DIP Accounts (from page 2)
             9,000  
 
              
Disbursements (from page 2)
             492,877  
 
              
 
                
7. ENDING BALANCE:
             4,515  
 
              
         
8.
  General Account Number(s):   Well Fargo # xxxxxx1638 (2)
 
       
 
 
  Depository Name & Location:   Wells Fargo Bank — Pasadena Commercial Banking
 
       
 
      350 W. Colorado Blvd, Suite 210, Pasadena, CA 91105
 
       
 
    Notes
 
(1)   Receipts reflected in Master Demand Account include collections prior to the petition date.
 
(2)   Where indicated by an “x” throughout the MOR, the applicable digit has been hidden to prevent theft or other unauthorized access to the account. The information will be available to parties in interest upon reasonable request.

Page 1 of 14

 

     
TOTAL DISBURSEMENTS FROM GENERAL ACCOUNT FOR CURRENT PERIOD
                                         
Date   Check           *Amount   **Amount    
mm/dd/yyyy   Number   Payee or DIP account   Purpose   Transferred   Disbursed   Amount
5/6/2009
  wire   Bowne of Los Angeles Inc   A/P vendor payments           $ 815     $ 815  
5/6/2009
  wire   Shareholder.com   A/P vendor payments             885       885  
5/6/2009
  wire   Robert Shackleton   Director Fees             5,833       5,833  
5/6/2009
  wire   John Charles Loring   Director Fees             5,833       5,833  
5/6/2009
  wire   David S. Depillo   Director Fees             5,833       5,833  
5/6/2009
  wire   Mark Schaffer   Director Fees             5,833       5,833  
5/6/2009
  wire   Barney Northcote   Director Fees             5,833       5,833  
5/6/2009
  wire   Kurtzman Carson Consultants   Professional fees             8,665       8,665  
5/6/2009
  wire   KPMG Corporate Finance LLC   Professional fees             25,000       25,000  
5/6/2009
  wire   FTI Consulting   Professional fees             50,453       50,453  
5/6/2009
  6000000424     Iron Mountain Records Mgmt Inc   A/P vendor payments             1,144       1,144  
5/6/2009
  6000000425     Mellon Investor Services LLC   A/P vendor payments             2,820       2,820  
5/6/2009
  6000000426     Merrill Lynch Pierce Fenner and Smith Inc.   A/P vendor payments             1,250       1,250  
5/6/2009
  6000000427     Stephen H. Gordon   Director Fees             5,833       5,833  
5/6/2009
  6000000428     West Payment Center   A/P vendor payments             6,966       6,966  
5/13/2009
  6000000429     Environetics   A/P vendor payments             636       636  
5/15/2009
  wire   Fremont General Corporation   Bank Account Transfer     9,000               9,000  
5/20/2009
  wire   Wells Fargo   Client Analysis Service Charge             2,846       2,846  
5/20/2009
  wire   Klee, Tuchin, Bogdanoff & Srern LLP   Professional fees             110,580       110,580  
5/20/2009
  6000000430     Iron Mountain Records Mgmt Inc   A/P vendor payments             1,444       1,444  
5/27/2009
  wire   Caldwell Law Firm   Professional fees             40,802       40,802  
5/27/2009
  wire   Weiland, Golden, Smiley, Wang, Ekvall, and Strok LLP   Professional fees             44,467       44,467  
5/27/2009
  wire   Stutman, Treister, and Glatt PC   Professional fees             159,104       159,104  
 
                                        
 
                                       
 
              TOTAL DISBURSEMENTS
                       THIS PERIOD: 		  $ 9,000     $ 492,877     $ 501,877  
 
                                       
 
*   Fill in amounts in this column if they are TRANSFERS to another DIP account (e.g. Payroll or Tax); the “amount” column will be filled in for you.
 
**   Fill in amounts in this column if they are DISBURSEMENTS to outside payees; the “amount” column will be filled in for you.

Page 2 of 14

 

GENERAL ACCOUNT
BANK RECONCILIATION
                         
Bank statement Date:
     5/31/2009     Balance on Statement:   $ 10,348  
 
                    
Plus deposits in transit (a):
                         
    Deposit Date     Deposit Amount          
 
                        
TOTAL DEPOSITS IN TRANSIT
                   $ —  
 
                      
Less Outstanding Checks (a):
                                 
    Check Number     Check Date     Check Amount          
 
 
     6000000427       5/6/2009       5,833          
 
                          
 
                                
TOTAL OUTSTANDING CHECKS:
                           $ 5,833  
 
                              
 
                                
Bank statement Adjustments:
                                
 
                              
Explanation of Adjustments-
                                
 
                                
ADJUSTED BANK BALANCE:
                           $ 4,515  
 
                              

Page 3 of 14

 

I. CASH RECEIPTS AND DISBURSEMENTS
B. (COMMERCIAL MONEY MARKET ACCOUNT)
                 
1. TOTAL RECEIPTS PER ALL PRIOR REPORTS
             34,681,139  
 
              
 
                
2. LESS: TOTAL TRANSFERS AND DISBURSEMENTS PER ALL PRIOR REPORTS
             8,160,764  
 
              
 
                
3. BEGINNING BALANCE:
             26,520,374  
 
              
 
                
4. RECEIPTS DURING CURRENT PERIOD:
                
Transferred from General Account
     9,000          
 
              
Interest Income
     2,684          
 
              
 
                
TOTAL RECEIPTS THIS PERIOD:
             11,684  
 
              
 
                
5. BALANCE:
             26,532,058  
 
              
 
                
6. LESS: TOTAL TRANSFERS AND DISBURSEMENTS DURING CURRENT PERIOD
                
Transfers to Other DIP Accounts (from page 5)
             492,000  
 
              
Disbursements (from page 5)
             3,014  
 
              
 
                
7. ENDING BALANCE:
             26,037,043  
 
              
         
8.
  COMMERCIAL MONEY MARKET ACCOUNT Number(s):   xxxxxx8097
 
       
 
        
 
  Depository Name & Location:   Wells Fargo Bank — Pasadena Commercial Banking
 
       
 
      350 W. Colorado Blvd, Suite 210, Pasadena, CA 91105
 
       

Page 4 of 14

 

         
TOTAL DISBURSEMENTS FROM COMMERCIAL MONEY MARKET ACCOUNT FOR CURRENT PERIOD
                                     
Date   Check           *Amount     **Amount        
mm/dd/yyyy   Number   Payee   Purpose   Transferred     Disbursed     Amount  
5/6/2009
   wire   Fremont General Corporation   Bank account transfer   $ 133,000             $ 133,000  
5/20/2009
   wire   Wells Fargo   Client Analysis Service Charge             3,014       3,014  
5/20/2009
   wire   Fremont General Corporation   Bank account transfer     112,000               112,000  
5/27/2009
   wire   Fremont General Corporation   Bank account transfer     247,000               247,000  
 
                                    
 
                              
 
           TOTAL DISBURSEMENTS THIS PERIOD:   $ 492,000     $ 3,014     $ 495,014  
 
                              
 
*   Fill in amounts in this column if they are TRANSFERS to another DIP account (e.g. Payroll or Tax); the “amount” column will be filled in for you.
 
**   Fill in amounts in this column if they are DISBURSEMENTS to outside payees; the “amount” column will be filled in for you.

Page 5 of 14

 

COMMERCIAL MONEY MARKET ACCOUNT
BANK RECONCILIATION
                         
Bank statement Date:
     5/31/2009     Balance on Statement:   $ 26,037,043  
 
                    
Plus deposits in transit (a):
                                 
            Deposit Date     Deposit Amount          
 
                                
 
                          
TOTAL DEPOSITS IN TRANSIT
                           0  
 
                          
 
Less Outstanding Checks (a):
                                
                                 
    Check Number     Check Date     Check Amount          
 
TOTAL OUTSTANDING CHECKS:
                             0  
 
                              
 
                                
Bank statement Adjustments:
                                
 
                              
Explanation of Adjustments-
                                
 
                                
ADJUSTED BANK BALANCE:
                           $ 26,037,043  
 
                              
 
*   It is acceptable to replace this form with a similar form
 
**   Please attach a detailed explanation of any bank statement adjustment

Page 6 of 14

 

II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS
AND OTHER PARTIES TO EXECUTORY CONTRACTS
                                 
    Frequency of Payments             Post-Petition payments        
Creditor, Lessor, Etc.   (Mo/Qtr)     Amount of Payment     not made (Number)     Total Due  
—
     —       —       —       —  
                         
 
                                
 
                   TOTAL DUE:     —  
III. TAX LIABILITIES
                 
FOR THE REPORTING PERIOD:  
May 31, 2009
       
Gross Sales Subject to Sales Tax:
     —  
       
 
      
       
Total Wages Paid:
     —  
       
 
      
                         
    Total Post-Petition           Date Delinquent
  Amounts Owing   Amount Delinquent   Amount Due
 
Federal Withholding
     —       —       N/A  
State Withholding
     —       —       N/A  
FICA- Employer’s Share
     —       —       N/A  
FICA- Employee’s Share
     —       —       N/A  
Federal Unemployment
     —       —       N/A  
Sales and Use
     —       —       N/A  
Real Property
     —       —       N/A  
Other:
                        
 
                  
TOTAL:
     —       —          
 
                  

Page 7 of 14

 

I. D SUMMARY SCHEDULE OF CASH
         
ENDING BALANCES FOR THE PERIOD:
     5/31/2009  
(Provide a copy of monthly account statements for each of the below)
                         
 
   General Account:     4,515          
 
                      
 
   Money Market Account:     26,037,043          
 
                      
 
   Payroll Account: (1)   N/A          
 
                      
 
                        
Other Accounts:
                        
 
                        
Other Monies:
                        
 
   Petty Cash (from below):     —          
 
                      
 
                        
 
                      
TOTAL CASH AVAILABLE:
                     26,041,558  
 
                      
                         
Petty Cash Transactions:                    
            Date   Purpose     Amount          
 
TOTAL PETTY CASH TRANSACTIONS:
             N/A       —  
 
                    
 
(1)   The Debtor’s payroll account has been closed.

Page 8 of 14

 

IV. AGING OF ACCOUNTS PAYABLE AND RECEIVABLE
                         
    Accounts Payable   Accounts Receivable
    Post-Petition   Pre-Petition   Post-Petition
30 days or less
     222,142       —       —  
31 - 60 days
     25,553       —       —  
61 - 90 days
     500               —  
91 - 120 days
     —               —  
Over 120 days
     21,273       118,819          
                   
TOTAL:
     269,468       118,819       —  
                   
V. INSURANCE COVERAGE
                             
                Policy Expiration   Premium Paid
Name of Carrier   Insurance Type   Amount of Coverage   Date   Through (Date)
XL Specialty
   Directors & Officers     15,000,000       4/01/09-7/01/09       7/1/09  
Continental Casualty
   Excess D&O     15,000,000       4/01/09-7/01/09       7/1/09  
U.S. Specialty
   Excess D&O     15,000,000       4/01/09-7/01/09       7/1/09  
RSUI Indemnity
   Excess D&O     15,000,000       4/01/09-7/01/09       7/1/09  
Allied World Natl
   Excess D&O     10,000,000       4/01/09-7/01/09       7/1/09  
U.S. Specialty
   Excess D&O     10,000,000       4/01/09-7/01/09       7/1/09  
Liberty Mutual
   Excess D&O     10,000,000       4/01/09-7/01/09       7/1/09  
Navigators Ins.
   Excess D&O     10,000,000       4/01/09-7/01/09       7/1/09  
Westchester Surplus
   Excess D&O     10,000,000       4/01/09-7/01/09       7/1/09  
Platte River
   Excess D&O     10,000,000       4/01/09-7/01/09       7/1/09  
Scottsdale Ins.
   Excess D&O     5,000,000       4/01/09-7/01/09       7/1/09  
XL Specialty
   Run-off D&O     20,000,000       1/01/07-1/01/14       1/1/14  
Continental Casualty
   Run-off D&O     15,000,000       1/01/07-1/01/14       1/1/14  
RSUI Indemnity
   Run-off D&O     15,000,000       1/01/07-1/01/14       1/1/14  
New Mkts Undrwrtr
   Run-off D&O     10,000,000       1/01/07-1/01/14       1/1/14  
Platte River
   Run-off D&O     10,000,000       1/01/07-1/01/14       1/1/14  
St. Paul Mercury
   Run-off D&O     10,000,000       1/01/07-1/01/14       1/1/14  
Federal Insurance
   Run-off D&O     10,000,000       1/01/07-1/01/14       1/1/14  
Liberty Mutual
   Run-off D&O     10,000,000       1/01/07-1/01/14       1/1/14  
Columbia Casualty
   Fiduciary Liability     10,000,000       4/01/09-7/01/09       7/1/09  
XL Specialty
   Excess Fiduciary Liability     10,000,000       4/01/09-7/01/09       7/1/09  
U.S. Specialty
   Excess Fiduciary Liability     10,000,000       4/01/09-7/01/09       7/1/09  
Navigators Ins.
   Excess Fiduciary Liability     10,000,000       4/01/09-7/01/09       7/1/09  
Allied World Natl
   Excess Fiduciary Liability     5,000,000       4/01/09-7/01/09       7/1/09  
Westchester Surplus
   Excess Fiduciary Liability     5,000,000       4/01/09-7/01/09       7/1/09  
XL Specialty
   Run-off Fiduciary     15,000,000       1/01/07-1/01/14       1/1/14  
Capital Indemnity
   Run-off Fiduciary     10,000,000       1/01/07-1/01/14       1/1/14  
Federal Insurance
   Run-off Fiduciary     10,000,000       1/01/07-1/01/14       1/1/14  
Houston Casualty
   Run-off Fiduciary     5,000,000       1/01/07-1/01/14       1/1/14  
National Union Fire
   Crime Coverage     15,000,000       4/01/09-7/01/09       7/1/09  
Zurich American
   Excess Crime Coverage     15,000,000       4/01/09-7/01/09       7/1/09  
Continental Ins.
   Excess Crime Coverage     10,000,000       4/01/09-7/01/09       7/1/09  
Federal Insurance
   Errors & Omissions     5,000,000       4/01/09-7/01/09       7/1/09  
U.S. Specialty
   Excess E&O     5,000,000       4/01/09-7/01/09       7/1/09  
Federal Insurance
   Commercial Automobile     1,000,000       1/01/09-1/01/10       1/1/10  
Federal Insurance
   Commercial Excess and Umbrella     5,000,000       1/01/09-1/01/10       1/1/10  
Great American
   Excess Umbrella     20,000,000       1/01/09-1/01/10       1/1/10  
Federal Insurance
   Commercial Package     14,499,247       1/01/09-1/01/10       1/1/10  
State Compensation Fund of CA
   Workers Compensation     1,000,000       1/01/09-1/01/10       1/1/10  

Page 9 of 14

 

VI. UNITED STATES TRUSTEE QUARTERLY FEES
(TOTAL PAYMENTS)
                                         
    Total Disbursements                           Quarterly Fees Still
Quarterly Period Ending (Date)   (during Quarter)   Quarterly Fees   Date Paid   Amount Paid   Owing
June 30, 2008
     0       325     22-Aug-2008     325       —  
June 30, 2008
     0       1     1-Oct-2008     1       —  
September 30, 2008
     851,493       4,875     19-Nov-2008     4,875       —  
December 31, 2008
     3,817,827       10,400     21-Jan-2009     10,400       —  
March 31, 2009
     3,442,105       10,400     15-Apr-2009     10,400       —  
 
                                        
 
                                    
 
             26,001               26,001       —  
 
                                    

Page 10 of 14

 

VII SCHEDULE OF COMPENSATION PAID TO INSIDERS
                         
    Date of Order Authorizing             Gross Compensation  
Name of Insider   Compensation     Authorized Gross Compensation     Paid During the Month  
No compensation disbursements made to insiders during the period.
                        
VIII. SCHEDULE OF OTHER AMOUNTS PAID TO INSIDERS
                     
    Date of Order Authorizing       Amount Paid During the
Name of Insider   Compensation   Description   Month
Robert Shackleton
     9/29/08     Director fees     5,833  
Mark Schaffer
     9/29/08     Director fees     5,833  
John Charles Loring
     9/29/08     Director fees     5,833  
Barney Northcote
     9/29/08     Director fees     5,833  
David S. Depillo
     9/29/08     Director fees     5,833  
Stephen H. Gordon
     9/29/08     Director fees     5,833  

Page 11 of 14

 

IX. PROFIT AND LOSS STATEMENT
(ACCRUAL BASIS ONLY)
                 
    Current Month     Cumulative Post-Petition  
    5/31/09     6/19/08-5/31/09  
Sales/Revenue:
                
Net Sales/Revenue
   $ —     $ —  
 
            
 
                
Cost of Goods Sold:
                
Cost of Goods Sold (COGS)
     —       —  
 
            
 
                
Gross Profit
     —       —  
Other Operating Income (Itemize)
     —       —  
 
            
 
                
Operating Expenses:
                
Payroll — Insiders
     —       —  
 
            
Compensation — regular (intercompany allocation)
     115,285       1,588,458  
 
            
Compensation — group insurance
     —       —  
 
            
Compensation — 401(k)/ESOP/Incentive
     629       (1,713,975 )
 
            
Occupancy
     330       501,361  
 
            
Payroll Taxes
             —  
 
            
Other Taxes (Itemize)
     —       —  
 
            
Information systems
     1,444       31,079  
 
            
Advertising and promotion
             23,635  
 
            
Telecom
     —       2,932  
 
            
Travel
             1,243  
 
            
Printing and supplies
             18,503  
 
            
Postage
             (29,156 )
 
            
All other
     40,860       506,384  
 
            
Depreciation and Amortization
     810       20,970  
 
            
Rent Expense — Real Property
             —  
 
            
Lease Expense — Personal Property
     —       —  
 
            
Insurance
     163,663       1,858,955  
 
            
Miscellaneous Operating Expenses (Itemize)
     —       —  
 
            
Total Operating Expenses
     323,021       2,810,389  
 
            
 
                
Net Gain/(Loss) from Operations
     (323,021 )     (2,810,389 )
 
            
 
                
Non-Operating Income:
                
Interest Income
     2,687       214,101  
 
            
Net Gain on Sale of Assets (Itemize)
     —       —  
 
            
Other — Equity in Earnings of Subsidiaries
     (4,362,546 )     153,138,634  
 
            
Other (Itemize) — SERP
     —       (75,276 )
 
            
Total Non-Operating income
     (4,359,859 )     153,277,459  
 
            
 
                
Non-Operating Expenses:
                
Interest Expense (1)
     23,914       272,620  
 
            
Legal and Professional (Itemize) (2)
     968,728       9,985,400  
 
            
Other (Itemize)
     —       —  
 
            
Total Non-Operating Expenses
     992,642       10,258,020  
 
            
 
                
NET INCOME/(LOSS)
   $ (5,675,522 )   $ 140,209,050 -  
 
            
 
    Notes:
 
(1)   Represents amortization of capitalized debt issuance costs.
 
(2)   Represents professional fee accruals (estimates) by the Debtor for financial statement (GAAP) purposes.

Page 12 of 14

 

X. BALANCE SHEET
(ACCRUAL BASIS ONLY)
                 
    Current Month End          
ASSETS
                
Current Assets:
                
Unrestricted Cash
   $ 26,041,558          
 
              
Accounts Receivable
     118,819          
 
              
Intercompany Receivable
     607,164          
 
              
Prepaid Expenses
     3,167,703          
 
              
Other (Itemize) — SERP / EBP Accounts & Other Benefit Accounts
     11,838,779          
 
              
Other (Itemize) — Investment — FG Financing
     3,092,777          
 
              
Total Current Assets
             44,866,800  
 
              
 
                
Property, Plant, and Equipment
     168,996          
 
              
Accumulated Depreciation/Depletion
     (15,201 )        
 
              
Net Property, Plant, and Equipment
             153,795  
 
              
 
                
Other Assets (Net of Amortization):
                
Other (Itemize) — GSOP Merrill Lynch Acct. xxx-37M01
     14,925          
 
              
Investment in Subsidiary
     437,721,659          
 
              
 
                
Total Other Assets
             437,736,584  
 
              
 
                
TOTAL ASSETS
           $ 482,757,179  
 
              
 
                
LIABILITIES
                
Post-petition Liabilities:
                
Accounts Payable
     269,468          
 
              
Accruals (1)
     2,283,936          
 
              
Taxes Payable
     —          
 
              
Professional fees
     —          
 
              
Accrued Interest Payable
     —          
 
              
Other
     5,629,729          
 
              
Total Post-petition Liabilities
             8,183,133  
 
              
 
                
Pre-petition Liabilities / Liabilities Subject to Compromise:
                
Priority Liabilities
     —          
 
              
Unsecured Liabilities (1)
     341,662,588          
 
              
Total Pre-petition Liabilities
             341,662,588  
 
              
 
                
TOTAL LIABILITIES
             349,845,721  
 
              
 
                
EQUITY:
                
Pre-petition Owners’ Equity
     (17,535,317 )        
 
              
Post-petition Profit/(Loss)
     140,209,050          
 
              
Direct Charges to Equity
     10,237,725          
 
              
TOTAL EQUITY
             132,911,458  
 
              
 
                
TOTAL LIABILITIES & EQUITY
           $ 482,757,179  
 
              
 
    Notes:
 
(1)   Includes accruals (estimates) by the Debtor for financial statement presentation (GAAP) purposes.

Page 13 of 14

 

XI. QUESTIONNAIRE
             
        No   Yes
 
            
1.
  Has the debtor-in-possession made any payments on its pre-petition unsecured debt, except as have been authorized by the court? If “Yes”, explain below:   X    
 
           
             
        No   Yes
 
            
2.
  Has the debtor-in-possession during this reporting period provided compensation or remuneration to any officers, directors, principals, or other insiders without appropriate authorization? If “Yes”, explain below:   X    
 
           
 
            
3.
  State what progress was made during the reporting period toward filing a plan of reorganization.        
 
  The Debtor filed a chapter 11 plan and related disclosure statement on June 1, 2009 [Docket Nos. 712-713]. No hearing has yet been set regarding those documents.        
 
            
4.
  Describe potential future developments which may have a significant impact on the case:        
 
  As noted, the Debtor filed a chapter 11 plan and related disclosure statement on June 1, 2009. The Official Committee of Unsecured Creditors has filed a motion to terminate the Debtor’s solicitation exclusivity period [Docket Nos. 728-732], which is set for hearing on July 14, 2009 [Docket No. 737].        
 
            
5.
  Attach copies of all Orders granting relief from the automatic stay that were entered during the reporting period.        
             
        No   Yes
 
            
6.
  Did you receive any exempt income this month, which is not set forth in the operating report? If “Yes”, please set forth the amounts and sources of the income below.   X    
 
           
 
            
I,
  Thea Stuedli, Chief Financial Officer of Fremont General Corporation        
 
  declare under penalty of perjury that I have fully read and understood the foregoing debtor-in-possession operating report and that the information contained herein is true and complete to the best of my knowledge.        

Page 14 of 14