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 29, 1999
SOUTHERN PACIFIC FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
California 1-11785 33-0636924
(State or other jurisdiction (Commission File No.) (IRS Employer Identification
of incorporation) No.)
One Centerpointe Drive, Suite 551
Lake Oswego, Oregon 97035
(Address of principal executive offices) (Zip Code)
(503) 684-6316
(Registrant's telephone number, including area code)
Item 5. Other Events.
The Corporation filed a voluntary petition with the United States
Bankruptcy Court for the District of Oregon (the "Bankruptcy Court") under
Chapter 11 of the United States Bankruptcy Code, Case No. 298-37613-elp11, on
October 1, 1998. The Corporation is required to file Monthly Operating Reports
with the Bankruptcy Court pursuant to Bankruptcy Rule 2015. In connection
therewith, attached hereto as Exhibit 99 are the financial statements (omitting
certain schedules) included in the Monthly Operating Reports for the Months
Ending December 1998 and January 1999, filed with the Bankruptcy Court on
January 29, 1999, and February 26, 1999, respectively.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits:
99.A Financial Statements from Monthly Operating Report for
December 1998
99.B Financial Statements from Monthly Operating Report for
January 1999
-1-
<PAGE>
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 thereunto duly authorized.
SOUTHERN PACIFIC FUNDING CORPORATION
Dated: March 10, 1999 By: /s/ Timothy A. Breedlove
Name: Timothy Breedlove
Title: Chief Financial Officer
INCOME STATEMENT (Page 1 of 2)
<TABLE>
Filing
October 1, 1998
October November December January to Date
------------- ------------- ------------- ---------- -------------
GROSS SALES
<S> <C> <C> <C> <C> <C>
Interest Income $ 2,969,812 $ 2,359,240 $ 133,026 $ - $ 5,462,078
Servicing Income 711,909 627,509 (219,394) 1,120,024
Prepayment Penalty Income 858,818 762,923 967,887 2,589,628
Less: Returns and Allowances -
------------- ------------- ------------- ---------- -------------
NET SALES 4,540,539 3,749,672 881,519 - 9,171,730
COST OF SALES
BEGINNING INVENTORY -
Add: PURCHASES -
Less: ENDING INVENTORY -
------------- ------------- ------------- ---------- -------------
COST OF GOODS SOLD - - - - -
GROSS PROFIT 4,540,539 3,749,672 881,519 - 9,171,730
OTHER OPERATING EXPENSES:
OFFICER SALARIES/DRAWS 413,199 612,381 299,637 1,325,217
DIRECT LABOR/SALARIES 427,198 740,169 364,673 1,532,040
BENEFITS/PAYROLL TAXES 249,293 206,435 11,991 467,719
SUPPLIES 26,820 13,597 28,404 68,821
INSURANCE 37,430 28,427 31,527 97,384
RENT 288,568 287,879 57,755 634,202
GENERAL AND ADMINISTRATIVE 563,389 1,623,341 1,497,692 3,684,422
<PAGE>
INCOME STATEMENT (Page 2 of 2) Filing
October 1, 1998
October November December January to Date
------------- ------------- ------------- ---------- -------------
DEPRECIATION/AMORTIZATION 425,077 420,588 327,568 1,173,233
------------- ------------- ------------- ---------- -------------
TOTAL OPERATING EXPENSES 2,430,974 3,932,817 2,619,247 - 8,983,038
------------- ------------- ------------- ---------- -------------
NET OPERATING INCOME (LOSS) 2,109,565 (183,145) (1,737,728) - 188,692
ADD: OTHER INCOME (2) 51,608 5,533 38,150 95,291
LESS OTHER EXPENSES:
INTEREST EXPENSE (2,053,875) (1,777,895) (517,419) (4,349,189)
OTHER (3) (1,077,948) 1,636,646 (3,467,844) (2,909,146)
------------- ------------- ------------- ---------- -------------
TOTAL OTHER EXPENSES (970,650) (318,861) (5,684,841) - (6,974,352)
GAIN/(LOSS) SALE OF ASSETS - 271,947 (544,418) (272,471)
------------- ------------- ------------- ---------- -------------
INCOME (LOSS) BEFORE TAXES (970,650) (46,914) (6,229,259) - (7,246,823)
INCOME TAXES (44,528) 698,677 1,145,987 1,800,136
============= ============= ============= ========== =============
NET INCOME (LOSS) $ (1,015,178) $ 651,763 $ (5,083,272) $ - $ (5,446,687)
============= ============= ============= ========== =============
</TABLE>
(2) Schedule of Other Income attached
(3) Schedule of Other Expense attached
<PAGE>
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATIONS
<TABLE>
Filing
October 1, 1998
October November December January to Date
-------------- ------------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C>
NET INCOME (LOSS) $ (1,015,178) $ 651,763 $ (5,083,272) $ $ (5,446,687)
ADJUSTMENTS TO RECONCILE
NET INCOME TO NET CASH:
DEPRECIATION/AMORTIZATION 425,077 420,588 327,568 1,173,233
(GAIN)LOSS ON SALE OF ASSETS - 855,295 544,418 1,399,713
(INCREASE)DECREASE IN RECEIVABLES 1,357,074 7,616,002 (1,375,363) 7,597,713
(INCREASE)DECREASE IN INVENTORY (1) 422,818 293,830,863 1,005,339 295,259,020
INCREASE(DECREASE) IN PAYABLES 1,206,020 (9,580,662) (457,059) (8,831,701)
OTHER, NET (2) 1,489,709 (30,604) 3,854,169 5,313,274
-------------- ------------- ------------- -------- -------------
NET CASH PROVIDED BY OPERATIONS 3,885,520 293,763,245 (1,184,200) 296,464,565
CASH FLOWS FROM INVESTING/FINANCING
(PURCHASE OF)FIXED ASSETS - -
CAPITAL CONTRIBUTIONS - -
LOAN PROCEEDS (SCHEDULE F, NUMBER 6) - 125,122 125,122
LOAN PRICIPAL/CAPITAL LEASE (PAYMENTS) (97,922) (294,217,616) (11,538) (294,327,076)
-------------- ------------- ------------- -------- -------------
NET INCREASE (DECREASE) IN CASH 3,787,598 (454,371) (1,070,616) 2,262,611
BEGINNING CASH 1,930,442 5,718,040 5,263,669 1,930,442
============== ============= ============= ======== =============
ENDING CASH $ 5,718,040 $ 5,263,669 $ 4,193,053 $ - $ 4,193,053
============== ============= ============= ======== =============
(1) Mortgage Loans held for Sale
(2) Accrual of Operations of subsidiaries $ 1,077,948 $(1,636,644) $ 3,467,844 $ 2,909,148
Residual Loan Interests 279,971 213,341 258,976 752,288
Prepaid expenses and other assets, net 131,790 1,392,699 127,349 1,651,838
============== ============= ============= =============
$ 1,489,709 $ (30,604) $ 3,854,169 $ 5,313,274
============== ============= ============= =============
</TABLE>
<PAGE>
COMPARATIVE BALANCE SHEET (Page 1 of 2)
<TABLE>
AS OF AS OF AS OF AS OF
10/31/98 11/30/98 12/31/98 01/31/99
-------------- -------------- -------------- -------------
ASSETS
Current Assets:
<S> <C> <C> <C> <C>
Cash $ 5,718,040 $ 5,263,669 $ 4,193,053 $
Inventory (Mortgage Loans Held for Sale) 301,695,376 7,864,513 6,859,174
Accounts Receivable 102,752,739 95,136,737 96,512,100
(net of bad debts)
Notes Receivable
Other (attach schedule) 1,940,083 1,621,035 1,535,181
-------------- -------------- -------------- -------------
Total Current Assets 412,106,238 109,885,954 109,099,508 -
Fixed Assets:
Property and Equipment 11,424,029 9,166,950 7,668,219
Less: Accumulated Depreciation (4,205,145) (4,133,906) (3,412,619)
-------------- -------------- -------------- -------------
Total Fixed Assets 7,218,884 5,033,044 4,255,600 -
Other Assets (attach schedule) 322,755,879 324,015,488 320,152,631
-------------- -------------- -------------- -------------
TOTAL ASSETS $ 742,081,001 $ 438,934,486 $ 433,507,739 $ -
============== ============== ============== =============
LIABILITIES
Postpetition Liabilities:
Accounts Payable $ 57,515 $ 104,337 $ 41,155 $
Notes Payable 125,122
Rents and Leases Payable
Taxes Payable 44,527
Accrued Interest
Other 4,790 729,034 1,239,891
-------------- -------------- -------------- -------------
Total Postpetition Liabilities 106,832 833,371 1,406,168 -
Prepetition Liabilities (Noncurrent):
Unsecured Debt 171,293,855 171,362,497 171,637,000
Notes Payable-Secured 455,556,112 151,616,803 151,576,120
Priority Claims:
Taxes 76,332 76,332 76,332
Wages 1,409,372 1,409,372 1,405,267
Deposits -
Other 18,536,567 17,882,417 16,736,430
-------------- -------------- -------------- -------------
Total Prepetition Liabilities 646,872,238 342,347,421 341,431,149 -
-------------- -------------- -------------- -------------
TOTAL LIABILITIES 646,979,070 343,180,792 342,837,317 -
OWNER EQUITY (DEFICIT) 95,101,931 95,753,694 90,670,422
-------------- -------------- -------------- -------------
TOTAL LIABILITIES AND OWNER EQUITY $ 742,081,001 $ 438,934,486 $ 433,507,739 $ -
============== ============== ============== =============
</TABLE>
<PAGE>
SCHEDULE F
STATEMENT OF PERSONNEL, INSURANCE AND OPERATIONS
1. PERSONNEL REPORT (required if more than ten employees)
<TABLE>
Full Time Part Time
<S> <C>
Total number of employees at beginning of period 108 -
Number hired during period 1 -
Number terminated or resigned during period 20 -
--------- ----------
Total number of employeed on payroll at period end 89 -
</TABLE>
Total Payroll for the period: $ 603,039
Includes payment of severance and retention compensation for terminated
employees
2. INSURANCE - Copies of certificates of insurance must accompany first report.
For subsequent months, explain any changes in insurance coverage:
Copies of insurance certificates have already been submitted.
3. Subsequent to the filing of the petition have any payments been made on
prepetition unsecured debt, except as authorized by the court?
X No.
-------------------------
<TABLE>
<S> <C>
-------------------------Yes. Identify amount, who was paid and date paid: -----------------------------------
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
4. Provide a narrative report of significant events which may have an effect on
the financial condition of the debtor or any events out of the ordinary
course of business, which have occurred since the period covered by this
report. Attach separate sheet(s) if necessary.
On January 6, 1999, the bankruptcy court approved an 18-month financing
between the debtor and Bear Stearns International Limited ("Bear Stearns").
Under the terms of the agreement, Bear Stearns agreed to loan approximately
$39 million to the debtor, the proceeds of which were used to repay the debt
to Wilshire Real Estate Partnership L.P. ("Wilshire"), a secured creditor of
the debtor. The loan was secured by the debtor's assets, including residual
certificates (representing the debtor's residual equity interest and
subordinated interest-only strips in the debtor's securitization offerings
of mortgager loan pools). The transaction was closed on January 8, 1999. The
court also approved the sale of mortgage loans with an unpaid principal
amount of approximately $10.8 million held by the debtor for sale, under
terms similar to other sales of mortgage loans by the debtor. The debtor has
entered into an agreement with Wilshire to act as its agent for sale of the
loans.
<PAGE>
STATEMENT OF PERSONNEL, INSURANCE, AND OPERATIONS - Continued
5. If assets, other than inventory sold in the ordinary course of business,
were disposed of during the current month, provide the following information
for each asset (attach separate sheet(s), if necessary):
<TABLE>
ENTITY TO WHOM AUTHORIZATION
TRANSFERRED (e.g. notice
(relationship dated ----- or
DESCRIPTION VALUE ON to debtor court order
OF ASSET BOOK BASIS if any) dated -----) Terms
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Atlanta, GA $109,699 First Franklin Financial Oct. 21, 1998 all sales of
personal property approved
Bellevue, WA $291,824 Forum West Associates
Boca Raton, FL $ 60,677 Maynards
Denver, CO $ 48,636 Maynards
Minneapolis, MN $ 65,827 Maynards
West Palm Beach, FL $109,962 Maynards
</TABLE>
<PAGE>
STATEMENT OF PERSONNEL, INSURANCE, AND OPERATIONS - Continued
6. For each loan obtained during the current month provide the following
information (attach separate sheet(s), if necessary):
<TABLE>
-----------------------------------------------------------------------------------------------------------------------
AMOUNT OF LOAN TERMS OF LOAN
LENDER'S NAME (describe right (interest rate, PROCEDURE FOR
(Relationship to receive future maturity OBTAINING
to debtor, if any) advances, if any) collateral, etc.) AUTHORIZATION
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Banker's Trust, as $ 125,122 Unsecured Funds were remitted directly to SPFC by
Trustee for Series trustee under terms that were established
1995-2, 1996-1, and by the trustee prior to the bankruptcy. The
1996-3 Securitization loan to SPFC represents an advance of
Trusts reserve funds held by the trustee on SPFC
securitizations.
</TABLE>
7. Statement of Disbursements and Fee paid to the U.S. Trustee pursuant to
Federal Rule of Bankruptcy Procedure 2015(a)(5):
<TABLE>
-----------------------------------------------------------------------------------------------------------------------
QUARTER ENDING TOTAL DISBURSEMENTS FEE PAID
-------------- ------------------- --------
<S> <C> <C>
March 31, 1998
----------------------------- ----------------
June 30, 1998
----------------------------- ----------------
September 30, 1998
----------------------------- ----------------
December 31, 1998 $ 6,857,519 (1)
----------------
</TABLE>
(1) Excludes servicing disbursements
<PAGE>
INCOME STATEMENT
SUPPORTING SCHEDULE (2) OTHER INCOME
<TABLE>
Filing
October 1, 1998
October November December January to Date
------------ ------------- ------------- --------- ---------------
<S> <C> <C> <C> <C> <C>
Insurance Commissions Revenue (Servicing) $ 16,271 $ 7,548 $ 6,811 $ $ 30,630
Miscellaneous Refunds Received 35,337 (2,015) 31,339 64,661
------------ ------------ ------------- --------- ---------------
TOTAL OTHER INCOME $ 51,608 $ 5,533 $ 38,150 $ - $ 95,291
============ ============ ============= ========= ===============
<PAGE>
INCOME STATEMENT
SUPPORTING SCHEDULE (3) OTHER EXPENSE
Filing
October 1, 1998
October November December January to Date
------------ ------------ ------------- --------- ---------------
Equity in Operations (Losses) of Subsidiaries
Oceanmark Financial Services $ (176,966) $ - $ (1,548,458) $ $ (1,725,424)
Home America Financial Services (111,167) (78,612) (314,202) (503,981)
Hallmark America (7,265) - - (7,265)
National Capital Funding, Inc. (92,012) (22,144) - (114,156)
Southern Pacific Mortgage Limited (690,538) 1,737,400 (1,605,184) (558,322)
------------ ------------ ------------- --------- ---------------
TOTAL OTHER EXPENSE $(1,077,948) $ 1,636,644 $ (3,467,844) $ - $ (2,909,148)
============ ============ ============= ========= ===============
</TABLE>
<PAGE>
COMPARATIVE BALANCE SHEET
SUPPORTING SCHEDULES - OTHER ASSETS
<TABLE>
AS OF AS OF AS OF AS OF
10/31/98 11/30/98 12/31/98 01/31/99
-------------- --------------- ---------------- ---------------
OTHER CURRENT ASSETS
<S> <C> <C> <C> <C>
Prepaid Expenses $ 1,785,204 $ 1,464,976 $ 1,384,119 $
Prepaid Lease Deposit 146,052 146,052 149,052
Prepaid Maintenance Contracts 3,216 1,238 1,059
Miscellaneous Servicing Accounts 5,611 8,769 951
-------------- --------------- ---------------- ---------------
TOTAL OTHER CURRENT ASSETS $ 1,940,083 $ 1,621,035 $ 1,535,181 $ -
============== =============== ================ ===============
OTHER ASSETS
Residual Loan Interests $ 302,703,733 $ 302,490,391 302,231,415
Mortage Servicing Rights 7,503,655 7,343,613 7,183,570
Investment in Subsidiaries 11,734,122 13,370,766 9,902,922
Real Estate Owned 814,369 810,718 834,724
-------------- --------------- ---------------- ---------------
TOTAL OTHER CURRENT ASSETS $ 322,755,879 $ 324,015,488 $ 320,152,631 $ -
============== =============== ================ ===============
</TABLE>
INCOME STATEMENT (Page 1 of 2)
<TABLE>
Filing
October 1, 1998
October November December January to Date
------------- ------------- ------------- ------------- --------------
GROSS SALES
<S> <C> <C> <C> <C> <C>
Interest Income $ 2,969,812 $ 2,359,240 $ 133,026 $ 120,039 $ 5,582,117
Servicing Income 711,909 627,509 (219,394) 584,778 1,704,802
Prepayment Penalty Income 858,818 762,923 967,887 1,232,858 3,822,486
Less: Returns and Allowances -
------------- ------------- -------------- ------------ --------------------
NET SALES 4,540,539 3,749,672 881,519 1,937,675 11,109,405
COST OF SALES
BEGINNING INVENTORY -
Add: PURCHASES -
Less: ENDING INVENTORY -
------------- ------------- -------------- ------------- --------------------
COST OF GOODS SOLD - - - - -
GROSS PROFIT 4,540,539 3,749,672 881,519 1,937,675 11,109,405
OTHER OPERATING EXPENSES:
OFFICER SALARIES/DRAWS 413,199 612,381 299,637 290,739 1,615,956
DIRECT LABOR/SALARIES 427,198 740,169 364,673 196,131 1,728,171
BENEFITS/PAYROLL TAXES 249,293 206,435 11,991 102,529 570,248
SUPPLIES 26,820 13,597 28,404 4,174 72,995
INSURANCE 37,430 28,427 31,527 28,427 125,811
RENT 288,568 287,879 57,755 51,533 685,735
GENERAL AND ADMINISTRATIVE 563,389 1,623,341 1,497,692 1,048,984 4,733,406
<PAGE>
INCOME STATEMENT (Page 2 of 2) Filing
October 1, 1998
October November December January to Date
------------- ------------- ------------- ------------- --------------
DEPRECIATION/AMORTIZATION 425,077 420,588 327,568 160,042 1,333,275
------------- ------------- ------------- ------------- --------------
TOTAL OPERATING EXPENSES 2,430,974 3,932,817 2,619,247 1,882,559 10,865,597
------------- ------------- ------------- ------------- --------------
NET OPERATING INCOME (LOSS) 2,109,565 (183,145) (1,737,728) 55,116 243,808
ADD: OTHER INCOME (2) 51,608 5,533 38,150 1,030,005 1,125,296
LESS OTHER EXPENSES:
INTEREST EXPENSE (2,053,875) (1,777,895) (517,419) (688,451) (5,037,640)
OTHER (3) (1,077,948) 1,636,646 (3,467,844) (1,095,623) (4,004,769)
------------- ------------- ------------- ------------- --------------
TOTAL OTHER EXPENSES (970,650) (318,861) (5,684,841) (698,953) (7,673,305)
GAIN/(LOSS) SALE OF ASSETS - 271,947 (544,418) (3,230,938) (3,503,409)
------------- ------------- ------------- ------------- --------------
INCOME (LOSS) BEFORE TAXES (970,650) (46,914) (6,229,259) (3,929,891) (11,176,714)
INCOME TAXES (44,528) 698,677 1,145,987 1,176,222 2,976,358
============= ============= ============= ============= ==============
NET INCOME (LOSS) $ (1,015,178) $ 651,763 $ (5,083,272) $ (2,753,669) $ (8,200,356)
============= ============= ============= ============= ==============
</TABLE>
(2) Schedule of Other Income attached
(3) Schedule of Other Expense attached
<PAGE>
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATIONS
<TABLE>
Filing
October 1, 1998
October November December January to Date
------------ -------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
NET INCOME (LOSS) $(1,015,178) $ 651,763 $ (5,083,272) $ (2,753,669) $ (8,200,356)
ADJUSTMENTS TO RECONCILE
NET INCOME TO NET CASH:
DEPRECIATION/AMORTIZATION 425,077 420,588 327,568 281,843 1,455,076
(GAIN)LOSS ON SALE OF ASSETS - 855,295 544,418 3,230,938 4,630,651
(INCREASE)DECREASE IN RECEIVABLES 1,357,074 7,616,002 (1,375,363) 2,254,471 9,852,184
(INCREASE)DECREASE IN INVENTORY (1) 422,818 293,830,863 1,005,339 242,557 295,501,577
INCREASE(DECREASE) IN PAYABLES 1,206,020 (9,580,662) (457,059) 721,311 (8,110,390)
OTHER, NET (2) 1,489,709 (30,604) 3,854,169 14,631 5,327,905
------------ -------------- ------------- ------------- ---------------
NET CASH PROVIDED BY OPERATIONS 3,885,520 293,763,245 (1,184,200) 3,992,082 300,456,647
CASH FLOWS FROM INVESTING/FINANCING
(PURCHASE OF)FIXED ASSETS - -
CAPITAL CONTRIBUTIONS - -
LOAN PROCEEDS (SCHEDULE F, NUMBER 6) - 125,122 38,960,936 39,086,058
LOAN PRINCIPAL/CAPITAL LEASE (PAYMENTS) (97,922) (294,217,616) (11,538) (38,690,645) (333,017,721)
------------ -------------- ------------- ------------- ---------------
NET INCREASE (DECREASE) IN CASH 3,787,598 (454,371) (1,070,616) 4,262,373 6,524,984
BEGINNING CASH 1,930,442 5,718,040 5,263,669 4,193,053 1,930,442
============ ============== ============= ============= ===============
ENDING CASH $ 5,718,040 $ 5,263,669 $ 4,193,053 $ 8,455,426 $ 8,455,426
============ ============== ============= ============= ===============
(1) Mortgage Loans held for Sale
(2) Accrual of Operations of subsidiaries $ 1,077,948 $ (1,636,644) $ 3,467,844 $ 1,095,623 $ 4,004,771
Residual Loan Interests 279,971 213,341 258,976 909,933 1,662,221
Prepaid expenses and other assets, net 131,790 1,392,699 127,349 (869,122) 782,716
============ ============== ============= ============= ===============
$ 1,489,709 $ (30,604) $ 3,854,169 $ 1,136,434 $ 6,449,708
============ ============== ============= ============= ===============
</TABLE>
<PAGE>
COMPARATIVE BALANCE SHEET (Page 1 of 2)
<TABLE>
AS OF AS OF AS OF AS OF
10/31/98 11/30/98 12/31/98 01/31/99
--------------- --------------- ---------------- ---------------
ASSETS
Current Assets:
<S> <C> <C> <C> <C>
Cash $ 5,718,040 $ 5,263,669 $ 4,193,053 $ 8,455,426
Inventory (Mortgage Loans Held for Sale) 301,695,376 7,864,513 6,859,174 6,616,617
Accounts Receivable 102,752,739 95,136,737 96,512,100 94,257,629
(net of bad debts)
Notes Receivable
Other (attach schedule) 1,940,083 1,621,035 1,535,181 3,149,915
--------------- --------------- ---------------- ---------------
Total Current Assets 412,106,238 109,885,954 109,099,508 112,479,587
Fixed Assets:
Property and Equipment 11,424,029 9,166,950 7,668,219 1,500,368
Less: Accumulated Depreciation (4,205,145) (4,133,906) (3,412,619) (408,799)
--------------- --------------- ---------------- ---------------
Total Fixed Assets 7,218,884 5,033,044 4,255,600 1,091,569
Other Assets (attach schedule) 322,755,879 324,015,488 320,152,631 317,174,516
--------------- --------------- ---------------- ---------------
TOTAL ASSETS $ 742,081,001 $ 438,934,486 $ 433,507,739 $ 430,745,672
=============== =============== ================ ===============
LIABILITIES
Postpetition Liabilities:
Accounts Payable $ 57,515 $ 104,337 $ 41,155 $ 99,496
Notes Payable 125,122 38,957,990
Rents and Leases Payable
Taxes Payable 44,527
Accrued Interest 78,563
Other 4,790 729,034 1,239,891 3,095,204
--------------- --------------- ---------------- ---------------
Total Postpetition Liabilities 106,832 833,371 1,406,168 42,231,253
Prepetition Liabilities (Noncurrent):
Unsecured Debt 171,293,855 171,362,497 171,637,000 171,606,879
Notes Payable-Secured 455,556,112 151,616,803 151,576,120 111,948,980
Priority Claims:
Taxes 76,332 76,332 76,332 76,332
Wages 1,409,372 1,409,372 1,405,267 1,405,267
Deposits -
Other 18,536,567 17,882,417 16,736,430 15,560,208
--------------- --------------- ---------------- ---------------
Total Prepetition Liabilities 646,872,238 342,347,421 341,431,149 300,597,666
--------------- --------------- ---------------- ---------------
TOTAL LIABILITIES 646,979,070 343,180,792 342,837,317 342,828,919
OWNER EQUITY (DEFICIT) 95,101,931 95,753,694 90,670,422 87,916,753
--------------- --------------- ---------------- ---------------
TOTAL LIABILITIES AND OWNER EQUITY $ 742,081,001 $ 438,934,486 $ 433,507,739 $ 430,745,672
=============== =============== ================ ===============
</TABLE>
<PAGE>
SCHEDULE F
STATEMENT OF PERSONNEL, INSURANCE AND OPERATIONS
1. PERSONNEL REPORT (required if more than ten employees)
<TABLE>
Full Time Part Time
<S> <C> <C>
Total number of employees at beginning of period 89 -
Number hired during period 1 -
Number terminated or resigned during period 4 -
--------- ----------
Total number of employeed on payroll at period end 86 -
</TABLE>
Total Payroll for the period: $ 509,865
Includes payment of severance and retention compensation for terminated
employees
2. INSURANCE - Copies of certificates of insurance must accompany first report.
For subsequent months, explain any changes in insurance coverage:
Copies of insurance certificates have already been submitted.
3. Subsequent to the filing of the petition have any payments been made on
prepetition unsecured debt, except as authorized by the court?
X No.
-----------------------------
<TABLE>
<S> <C>
-----------------------------Yes. Identify amount, who was paid and date paid: -----------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
</TABLE>
4. Provide a narrative report of significant events which may have an effect on
the financial condition of the debtor or any events out of the ordinary
course of business, which have occurred since the period covered by this
report. Attach separate sheet(s) if necessary.
On February 10, 1999, the Debtor filed a report on Form 8-K with the
Securities and Exchange Commission, containing the following text:
Southern Pacific Funding Corporation (SPFC) stated that, in connection with
the development of its plan of reorganization in its Chapter 11 bankruptcy
case, it is soliciting offers from certain major financial institutions and
other institutional accredited investors to purchase the residual interests
that it retained in connection with the securitization of its mortgage loan
pools, as well as certain other corporate assets, including its loan
servicing rights and servicing platform. The purchase may take the form of
an acquisition of newly issued capital stock of SPFC following the approval
in the bankruptcy case of its plan of reorganization. SPFC plans to conduct
a two-phase private bidding process with interested parties with the
assistance of a placement agent. SPFC anticipates that the sale process will
be completed in the 1999 second quarter. The securities to be offered as
part of SPFC's assets will not be registered under the Securities Act of
1933 or state securities laws and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements.
<PAGE>
STATEMENT OF PERSONNEL, INSURANCE, AND OPERATIONS - Continued
5. If assets, other than inventory sold in the ordinary course of business,
were disposed of during the current month, provide the following information
for each asset (attach separate sheet(s), if necessary):
<TABLE>
ENTITY TO WHOM AUTHORIZATION
TRANSFERRED (e.g. notice
(relationship dated ----- or
DESCRIPTION VALUE ON to debtor court order
OF ASSET BOOK BASIS if any) dated -----) Terms
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fixed Assets Oct. 21, 1998 all sales of
personal property approved
Vienna $ 39,773 Maynards
Chicago $ 21,786 Maynards
Corona $ 24,013 Maynards
Dallas $ 329,679 Maynards
Houston $ 59,941 Maynards
Indianapolis $ 108,034 Maynards
Irvine $ 310,855 Maynards
Lake Oswego $ 2,207,684 Maynards
Newport Beach $ 1,231 Maynards
Pasadena $ 17,196 Maynards
Pleasant Hill $ 38,412 Maynards
Rancho Cucamonga $ 149,806 Maynards
San Bernardino $ 390,518 Maynards
San Diego $ 23,500 Maynards
Sherman Oaks $ 24,886 Maynards
Wakefield $ 95,887 Maynards
Woodland Hills $ 71,200 Maynards
REO in Castle Rock, CO $ 813,334 Michael J. Parrottino Dec. 28, 1998
</TABLE>
<PAGE>
STATEMENT OF PERSONNEL, INSURANCE, AND OPERATIONS - Continued
6. For each loan obtained during the current month provide the following
information (attach separate sheet(s), if necessary):
<TABLE>
------------------------------------------------------------------------------------------------------------------------
AMOUNT OF LOAN TERMS OF LOAN
LENDER'S NAME (describe right (interest rate, PROCEDURE FOR
(Relationship to receive future maturity OBTAINING
to debtor, if any) advances, if any) collateral, etc.) AUTHORIZATION
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bear Stearns $ 38,960,936 Funded January 8, 1999; Court Approval - January 6, 1999
LIBOR plus 5.4% for 6 months,
LIBOR plus 9.4% for 12
additional months;
Substantially all corporate
assets are pledged as
collateral
</TABLE>
7. Statement of Disbursements and Fee paid to the U.S. Trustee pursuant to
Federal Rule of Bankruptcy Procedure 2015(a)(5):
<TABLE>
-----------------------------------------------------------------------------------------------------------------
QUARTER ENDING TOTAL DISBURSEMENTS FEE PAID
-------------- ------------------- --------
<S> <C> <C>
March 31, 1998 ------------------- --------
June 30, 1998 ------------------- --------
September 30, 1998 ------------------- --------
December 31, 1998 $ 6,857,519 (1) $ 10,000
March 31, 1999 $ 1,569,712 (1)
</TABLE>
(1) Excludes servicing disbursements
<PAGE>
INCOME STATEMENT
SUPPORTING SCHEDULE (2) OTHER INCOME
<TABLE>
Filing
October 1, 1998
October November December January to Date
-------- -------- --------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Insurance Commissions Revenue (Servicing) $ 16,271 $ 7,548 $ 6,811 $ 20,763 $ 51,393
Discount on Early Payoff of Secured Financing 1,000,000 1,000,000
Miscellaneous Refunds Received 35,337 (2,015) 31,339 9,242 73,903
-------- ------- -------- ----------- -----------
TOTAL OTHER INCOME $ 51,608 $ 5,533 $ 38,150 $ 1,030,005 $ 1,125,296
======== ======= ======== =========== ===========
</TABLE>
<PAGE>
INCOME STATEMENT
SUPPORTING SCHEDULE (3) OTHER EXPENSE
<TABLE>
Filing
October 1, 1998
October November December January to Date
------------- ------------ ------------- ------------- ---------------
Equity in Operations (Losses) of Subsidiaries
<S> <C> <C> <C> <C> <C>
Oceanmark Financial Services $ (176,966) $ - $ (1,548,458) $ (246,476) $ (1,971,900)
Home America Financial Services (111,167) (78,612) (314,202) (32,740) (536,721)
Hallmark America (7,265) - - (7,265)
National Capital Funding, Inc. (92,012) (22,144) - (114,156)
Southern Pacific Mortgage Limited (690,538) 1,737,400 (1,605,184) (816,407) (1,374,729)
------------- ------------ ------------- ------------- -------------
TOTAL OTHER EXPENSE $ (1,077,948) $ 1,636,644 $ (3,467,844) $ (1,095,623) $ (4,004,771)
============= ============ ============= ============= =============
</TABLE>
<PAGE>
COMPARATIVE BALANCE SHEET
SUPPORTING SCHEDULES - OTHER ASSETS
<TABLE>
AS OF AS OF AS OF AS OF
10/31/98 11/30/98 12/31/98 01/31/99
--------------- --------------- ---------------- ---------------
OTHER CURRENT ASSETS
<S> <C> <C> <C> <C>
Prepaid Expenses $ 1,785,204 $ 1,464,976 $ 1,384,119 $ 2,997,327
Prepaid Lease Deposit 146,052 146,052 149,052 149,052
Prepaid Maintenance Contracts 3,216 1,238 1,059 880
Miscellaneous Servicing Accounts 5,611 8,769 951 2,656
--------------- --------------- ---------------- ---------------
TOTAL OTHER CURRENT ASSETS $ 1,940,083 $ 1,621,035 $ 1,535,181 $ 3,149,915
=============== =============== ================ ===============
OTHER ASSETS
Residual Loan Interests $ 302,703,733 $ 302,490,391 $ 302,231,415 $ 301,321,482
Mortgage Servicing Rights 7,503,655 7,343,613 7,183,570 7,023,528
Investment in Subsidiaries 11,734,122 13,370,766 9,902,922 8,807,299
Real Estate Owned 814,369 810,718 834,724 22,207
--------------- --------------- ---------------- ---------------
TOTAL OTHER ASSETS $ 322,755,879 $ 324,015,488 $ 320,152,631 $ 317,174,516
=============== =============== ================ ===============
</TABLE>
