EX-99.1 2 d279133dex991.htm MONTHLY OPERATING REPORT FOR NOVEMBER 2011 Monthly Operating Report For November 2011

Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

 

   X   

In re:

    :    Chapter 11
   :   

BB LIQUIDATING INC., et al. 1

    :    Case No: 10-14997
   :   

Debtors.

    :    Jointly Administered
   X   

Monthly Operating Report For

November 2011

 

DEBTORS’ ADDRESS:

    2100 Ross Avenue, 21st Floor
   Dallas, Texas 75201

DEBTORS’ ATTORNEYS:

    Stephen Karotkin
   WEIL, GOTSHAL & MANGES LLP
   767 Fifth Avenue
   New York, New York 10153
   Telephone: (212) 310-8000
   Facsimile: (212) 310-8007
   -and-
   Martin A. Sosland (admitted pro hac vice )
   WEIL, GOTSHAL & MANGES LLP
   200 Crescent Court, Suite 300
   Dallas, Texas 75201
   Telephone: (214) 746-7700
   Facsimile: (214) 746-7777

This Monthly Operating Report (“MOR”) has been prepared solely for the purpose of complying with the monthly reporting requirements applicable in these chapter 11 cases and is in a format acceptable to the United States Trustee. The financial information contained herein is limited in scope and covers a limited time period. Moreover, such information is preliminary and unaudited, and is not prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States.

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.

 

/s/ Bruce Lewis     12/30/2011
Bruce Lewis    
Principal Executive Officer    
Blockbuster Inc.    

 

1

The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are: BB Liquidating Inc. (5102); BB Liquidating Canada Inc. (1269); BB Liquidating Digital Technologies Inc. (9222); BB Liquidating Distribution, Inc. (0610); BB Liquidating GC, Inc. (1855); BB Liquidating Global Services Inc. (3019); BB Liquidating International Spain Inc. (7615); BB Liquidating Investments LLC (6313); BB Liquidating Procurement LP (2546); BB Liquidating Video Italy, Inc (5068); BB Liquidating ML, LLC (5575); BB Liquidating Trading Zone Inc. (8588); and BB Liquidating B2 LLC (5219).

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

 

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011
    Federal Tax I.D. #   52-1655102

CORPORATE MONTHLY OPERATING REPORT

 

REQUIRED DOCUMENTS

    Form No.   Document
Attached		    Explanation
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

    MOR-1 (CON’T)      x

Cash disbursements journals

    MOR-1 (CON’T)   x   

Statement of Operations

    MOR-2   x   

Balance Sheet

    MOR-3   x   

Status of Post-petition Taxes

    MOR-4   x   

Copies of IRS Form 6123 or payment receipt

         not applicable

Copies of tax returns filed during reporting period

         not applicable

Summary of Unpaid Post-petition Debts

    MOR-4   x   

Listing of Aged Accounts Payable

         x

Accounts Receivable Reconciliation and Aging

    MOR-5   x   

Taxes Reconciliation and Aging

    MOR-5   x   

Payments to Insiders and Professionals

    MOR-6   x   

Post Petition Status of Secured Notes, Leases Payable

    MOR-6   x   

Debtor Questionnaire

    MOR-7   x   

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   October 2011

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

(in millions)

 

     November 2011     YTD November 2011  

Cash flows from operating activities:

     

Net income (loss)

    $ (0.9 )    $ (201.8 ) 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

     

Depreciation and intangible amortization

      —          39.4   

Rental library purchases

      —          (66.7 ) 

Rental library amortization

      —          113.3   

Loss on sale/disposal of store operations

      —          —     

Impairment of long-lived assets

      —          0.6   

Non-cash share-based compensation

      —          —     

Gain on sale of store operations

      —          —     

Deferred taxes and other

      —          2.1   

Changes in operating assets and liabilities:

        —     

Change in receivables

      —          13.1   

Change in merchandise inventories

      —          44.2   

Change in prepaid and other assets

      —          27.8   

Change in liabilities subject to compromise

      (2.0 )      227.1   

Change in accounts payable

      0.5        (139.3 ) 

Change in accrued expenses and other liabilities

      (0.1 )      (128.7 ) 
  

 

 

    

 

 

  

Net cash provided by (used in) operating activities

      (2.5 )      (68.9 ) 
  

 

 

    

 

 

  

Cash flows from investing activities:

     

Capital expenditures

      —          (5.1 ) 

Change in reserve for Operating Period claims

      —          28.1   

Proceeds from sale of store operations

      —          —     

Other investing activities

      —          3.4   
  

 

 

    

 

 

  

Net cash provided by (used in) investing activities

      —          26.4   
  

 

 

    

 

 

  

Cash flows from sale of assets to DISH Network:

     

Loss on Sale

      —          (582.8 ) 

Change in rental library on sale

      —          143.4   

Change in merchandise inventories on sale

      —          56.2   

Change in receivables on sale

      —          53.3   

Change in prepaid and other assets on sale

      —          382.2   

Change in fixed assets on sale

      —          87.2   

Change in restricted cash on sale

      —          —     
  

 

 

    

 

 

  

Net cash provided by sale to Dish Network

      —          139.5   
  

 

 

    

 

 

  

Cash flows from financing activities:

     

Proceeds from DIP Financing

      —          —     

Repayments on DIP Financing

      —          —     

Repayments on senior secured notes

      —          (124.6 ) 

Debt financing costs

      —          —     

Capital lease payments

      —          (0.8 ) 
  

 

 

    

 

 

  

Net cash provided by (used in) financing activities

      —          (125.4 ) 
  

 

 

    

 

 

  

Effect of exchange rate changes on cash

      —          —     
  

 

 

    

 

 

  

Net (decrease) increase in cash and cash equivalents

      (2.5 )      (28.4 ) 

Cash and cash equivalents at beginning of period

      40.3        66.2   
  

 

 

    

 

 

  

Cash and cash equivalents at end of period

      37.8      $ 37.8   
  

 

 

    

 

 

  

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

BANK RECONCILIATIONS

Continuation Sheet for MOR-1

 

GL#    Bank Name    Bank Balance      Deposits &
Transfers
in Transit		      Outstanding
checks		     Other
Reconciling
Items		      GL Balance  

Cash

    Bank of America    $ 40,025,434       $ —         $ (2,292,562 )    $ —         $ 37,732,872   
     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  
  

Total Cash & Cash Equivalents

    $ 40,025,434       $ —         $ (2,292,562 )    $ —         $ 37,732,872   
     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

 

Bank of America

           

Dallas, Texas

         Statement date: 11/30/2011   
 

Statement Period

      11/01/2011-11/30/2011       Statement Beginning Balance      43,203,784.16   
 

Number of Deposits /Credits

      2       Amount of Deposits /Credits      442,720.89   
 

Number of Checks

      239       Amount of Checks      3,370,942.00   
 

Number of Other Debits

      2       Amount of Other Debits      250,129.12   
        Statement Ending Balance      40,025,433.93   

 

* The Debtors have submitted their bank statement to the United States Trustee.

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

SCHEDULE OF CASH DISBURSEMENTS

(in millions)

Continuation Sheet for MOR-1

 

           November 2011        

Cash Balance as of 10/31/11

        $ 40,280,227   

Cash disbursements during the period:

       

April professional fees (as shown on MOR 6):

       

Sidley Austin LLP

      (1,636 )     

Kurtzman Carson Consultants

      (61,594 )     

Cooley Godward Kronish LLP

      (34,003 )     

Weil Gotshal

      (149,211 )     
  

 

 

      

Total April professional fees

        (246,444 )   

Contract labor:

       

Legal

      (4,500 )     

Claims administration

      (3,500 )     
  

 

 

      

Total contract labor

        (8,000 )   

Payments for Administrative Priority Expenses

        (2,013,180 )   

Payments for property taxes

        (64,064 )   

Payments for miscellaneous G&A

        (215,667 )   
    

 

 

    

Total cash disbursements during the period

          (2,547,355 ) 
      

 

 

  

Cash Balance as of 11/30/11

        $ 37,732,872   
      

 

 

  

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

STATEMENT OF OPERATIONS (Income Statement)

(in millions)

 

     November 2011     YTD November 2011  

Revenues:

     

Base rental revenues

    $ —        $ 303.5   

Previously rented product (“PRP”) revenues

      —          140.2   
  

 

 

    

 

 

  

Total rental revenues

      —          443.7   

Merchandise sales

      —          63.0   

Other revenues

      —          12.6   
  

 

 

    

 

 

  

Total Revenue

      —          519.3   
  

 

 

    

 

 

  

Cost of sales:

     

Cost of rental revenues

      —          175.9   

Cost of merchandise sold

      —          68.7   
  

 

 

    

 

 

  

Total cost of sales

      —          244.6   
  

 

 

    

 

 

  

Gross profit

      —          274.7   
  

 

 

    

 

 

  

Operating expenses:

     

General and administrative

      0.9        461.8   

Advertising

      —          5.5   

Depreciation and intangible amortization

      —          39.4   

Impairment of goodwill and other long-lived assets

      —          0.6   
  

 

 

    

 

 

  

Total Operating Expenses

      0.9        507.3   
  

 

 

    

 

 

  

Operating income (loss)

      (0.9 )      (232.6 ) 

Interest expense

      —          0.6   

Interest income

      —          (0.1 ) 

Other items, net

      —          (1.4 ) 
  

 

 

    

 

 

  

Income (loss) from continuing operations before reorganization items and income taxes

      (0.9 )      (233.5 ) 

Reorganization items, net (income)/loss

      —          (46.9 ) 

(Benefit)/provision for income taxes

      —          1.0   

Equity in (income)/loss of non-debtor subsidiaries

      —          14.7   
  

 

 

    

 

 

  

Income (loss) from continuing operations

      (0.9 )      (202.3 ) 

(Loss) from sale of assets to DISH Network

      —          (582.8 ) 

Income (loss) from discontinued operations, net of tax

      —          —     
  

 

 

    

 

 

  

Net income (loss)

      (0.9 )      (785.1 ) 

Preferred stock dividends

      —          —     
  

 

 

    

 

 

  

Net income (loss) applicable to common stockholders

   $ (0.9 )    $ (785.1 ) 
  

 

 

    

 

 

  

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

BALANCE SHEET

(in millions)

 

     As of 11/30/2011  

Assets

   

Current assets:

   

Cash and cash equivalents

    $ 37.7   

Reserve for Operating Period claims

      7.5   

Merchandise inventories

      —     

Rental library, net

      —     

Prepaid and other current assets

      —     
  

 

 

  

Total current assets

      45.2   

Property and equipment, net

      —     

Deferred income taxes

      —     

Investment in non-debtor subsidiaries

      —     

Intangibles, net

      —     

Restricted cash

      —     

Other assets

      —     
  

 

 

  

Total Assets

    $ 45.2   
  

 

 

  

Liabilities and Stockholders’ Equity (Deficit)

   

Current liabilities:

   

Accounts payable

    $ 4.1   

Accrued expenses

      0.5   

Debtor-in-possession loan

      —     

Deferred income taxes

      —     
  

 

 

  

Total current liabilities

      4.6   

Other liabilities

      —     
  

 

 

  

Total Liabilities before LSTC

      4.6   

Liabilities subject to compromise

      1,351.5   
  

 

 

  

Total Liabilities

      1,356.1   
  

 

 

  

Total stockholders’ equity (deficit)

      (1,310.9 ) 
  

 

 

  

Total Liabilities and Stockholders’ Equity (Deficit)

    $ 45.2   
  

 

 

  

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

STATUS OF POST-PETITION TAXES

 

Federal

    Beginning Tax      Amount
Withheld and/or
Accrued		      Amount Paid     Ending Tax  

Withholding

    $ —         $ —         $ —        $ —     

FICA-Employee

      —           —           —          —     

FICA-Employer

      —           —           —          —     

Unemployment

      —           —           —          —     

Income

      —           —           —          —     

Other:

         —           —       

Total Federal Taxes

      —           —           —          —     

State and Local

           

Withholding

      —           —           —          —     

Sales

      —           —           —          —     

Excise

         —           —       

Unemployment

      —           —           —          —     

Real Property*

      —           —           —          —     

Personal Property*

      545,999         —           (64,064 )      481,935   

Other: Income/Franchise

      —           —           —          —     

Total State and Local

      545,999         —           (64,064 )      481,935   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total Taxes

    $ 545,999       $ —         $ (64,064 )    $ 481,935   
  

 

 

     

 

 

     

 

 

    

 

 

  

SUMMARY OF UNPAID POST-PETITION DEBTS

Attach aged listing of accounts payable.

 

     Number of Days Past Due  

DESCRIPTION

    Current      0-30      31-60      61-90      Over 91      Total  

AP - Product

    $ —         $ —         $ —         $ —         $ —         $ —     

AP - Legal & Professional Fees

      481,935         —           —           —           —           481,935   

AP - Other

      —           —           —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

TOTAL POST-PETITION DEBTS

    $ 481,935       $ —         $ —         $ —         $ —         $ 481,935   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

* The Real Property and Personal Property taxes are considered “postpetition” based off of when the payment is assessed by the taxing authority.

The detail of the AP - Legal and Professional Fees can be seen on MOR-6. The bar date of 6/15/11 for administrative claims required all other AP to be reclassified to liabilities subject to compromise.

The Debtors did not file Form 6123 during this period.

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

 

Accounts Receivable Reconciliation

    Amount  

Total Accounts Receivable at the beginning of the reporting period

    $ —     

Plus: Amounts billed during the period

      —     

Less: Amounts collected during the period

      —     

Less: Amounts written off during the period

      —     

Less: Amounts reserved during the period

      —     

Change in store accounts receivable, net

      —     

Accounts Receivables sold to DISH Network

      —     
  

 

 

  

Total Accounts Receivable at the end of the reporting period

    $ —     
  

 

 

  

 

Accounts Receivable Aging

    9/30/2011  

0 - 30 days old

    $ —     

31 - 60 days old

      —     

61 - 90 days old

      —     

91 - 120 days old

      —     

121+ days old

      —     

Total Aged Accounts Receivable

      —     

Store Accounts Receivable

      —     

Total Accounts Receivable

      —     

Less: Bad Debts (Amount considered uncollectible)

      —     
  

 

 

  

Net Accounts Receivable***

    $ —     
  

 

 

  

TAXES RECONCILIATION AND AGING

 

Taxes Payable

    Current      1-30 Days      31-60 Days      61-90 Days      91+ Days      Total  

Federal

    $ —         $ —                  $ —     

State and Local

      —                       —     

Other

      481,935         —                    481,935   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Taxes Payable

    $ 481,935       $ —         $ —         $ —         $ —         $ 481,935   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

PAYMENTS TO INSIDERS AND PROFESSIONALS

 

INSIDERS

NAME

    TYPE OF PAYMENT    AMOUNT PAID    TOTAL PAID TO DATE

(1) NONE

         
        
        
        
        
        
        
        

TOTAL PAYMENTS TO INSIDERS

         

 

(1) No payments other than ordinary wages and benefits occurred during the reporting period.

 

PROFESSIONALS

  

NAME

    DATE OF
COURT
ORDER
AUTHORIZING
PAYMENT		      AMOUNT
APPROVED		      AMOUNT PAID
November 2011		      TOTAL PAID
TO DATE		      TOTAL
INCURRED
& UNPAID*		  

SIDLEY AUSTIN LLP (1)

      9/27/2010       $ 3,552,286       $ 1,636       $ 3,545,697       $ 6,589   

JEFFERIES & COMPANY INC (1)

      9/27/2010         1,550,496         —           1,550,496         —     

ALVAREZ & MARSAL NORTH AMERICA LLC (3)

      10/27/2010         5,583,044         —           5,113,678         469,366   

ROTHSCHILD INC (3)

      11/2/2010         3,205,405         —           3,205,405         —     

KURTZMAN CARSON CONSULTANTS LLC (3)

      9/23/2010         4,295,204         61,594         4,174,943         120,261   

DJM ASSET MANAGEMENT LLC (3)

      11/23/2010         150,000         —           150,000         —     

RETAIL REGROUP INC (3)

      11/23/2010         150,000         —           150,000         —     

DELOITTE TAX LLP (3)

      11/9/2010         583,711         —           467,248         116,463   

SKADDEN ARPS SLATE MEAGHER & FLOM LLP (1)

      9/27/2010         211,440         —           211,440         —     

KORN/FERRY INTERNATIONAL (3)

      11/10/2010         142,132         —           142,132         —     

COOLEY GODWARD KRONISH LLP (2)

      11/23/2010         2,784,548         34,003         2,214,062         570,486   

FTI CONSULTING (2)

      12/2/2010         909,331         —           718,563         190,768   

BLOODWORTH CARROLL & BANOWSKY PC (3)

      11/23/2010         164,395         —           131,516         32,879   

RAY & GLICK LTD. (3)

      11/23/2010         959,250         —           767,400         191,850   

CHAIKEN LEGAL GROUP PC (3)

      11/23/2010         350,055         —           280,044         70,011   

SHEPPARD MULLIN (1)

      9/27/2010         327,327         —           327,327         —     

WEIL GOTSHAL (3)

      10/27/2010         8,043,942         149,211         6,234,569         1,809,373   

PRICEWATERHOUSE COOPERS (3)

      2/8/2011         1,811,368         —           1,478,461         332,907   

DELOITTE FINANCIAL ADVISORY (3)

      2/8/2011         363,993         —           288,837         75,156   

ERNST & YOUNG (3)

      4/4/2011         524,806         —           416,514         108,292   
     

 

 

     

 

 

     

 

 

     

 

 

  

TOTAL PAYMENTS TO PROFESSIONALS

       $ 35,662,733       $ 246,444       $ 31,568,332       $ 4,094,401   
     

 

 

     

 

 

     

 

 

     

 

 

  

 

* INCLUDE ALL FEES INCURRED, BOTH APPROVED AND UNAPPROVED
(1) Fees paid pursuant to the DIP Financing Order for professionals of the DIP lenders and DIP Agent.
(2) Fees for professionals retained to represent Unsecured Creditors’ Committee
(3) Fees for professionals retained to represent BB Liquidating Inc.

POST-PETITION STATUS OF SECURED NOTES, LEASES PAYABLE

AND ADEQUATE PROTECTION PAYMENTS

 

NAME OF CREDITOR

    SCHEDULED
MONTHLY
PAYMENT
DUE		      AMOUNT
PAID
DURING
MONTH		      TOTAL
UNPAID
POST-
PETITION		  

DIP Financing

    $ —         $ —         $ —     

DIP Interest

         —           —     

Leases Payable

      —           —           —     

Adequate Assurance Payments - Utilities

      —           —           —     

Adequate Assurance Payments - Insurance

      —           —           —     
     

 

 

     

 

 

  

TOTAL PAYMENTS

       $ —        
     

 

 

     

 

 

  

In re   BB LIQUIDATING INC., et al.   Case No.   10-14997
  Debtor   Reporting Period:   November 2011

 

DEBTOR QUESTIONNAIRE

 

    

Must be completed each month. If the answer to any of the questions is “Yes”, provide a detailed explanation of each item. Attach additional
sheets if necessary.

    Yes    No
1    Have any assets been sold or transferred outside the normal course of business this reporting period?       X
2    Have any funds been disbursed from any account other than a debtor in possession account this reporting period?       X
3    Is the Debtor delinquent in the timely filing of any post-petition tax returns?       X
4    Are workers compensation, general liability or other necessary insurance coverage expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?    X   
5    Is the Debtor delinquent in paying any insurance premium payment?       X
6    Have any payments been made on pre-petition liabilities this reporting period?       X
7    Are any post petition receivables (accounts, notes or loans) due from related parties?       X
8    Are any post petition payroll taxes past due?       X
9    Are any post petition State or Federal income taxes past due?       X
10    Are any post petition real estate taxes past due?       X
11    Are any other post petition taxes past due?       X
12    Have any pre-petition taxes been paid during this reporting period?       X
13    Are any amounts owed to post petition creditors delinquent?       X
14    Are any wage payments past due?       X
15    Have any post petition loans been received by the Debtor from any party?       X
16    Is the Debtor delinquent in paying any U.S. Trustee fees?       X
17    Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?       X
18    Have the owners or shareholders received any compensation outside of the normal course of business?       X

 

4    The Debtors have only one employee and are not required to maintain workers compensation insurance.