<PAGE>
As filed with the Securities and Exchange Commission on December 1, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) November 20, 1998
FRETTER, INC.
(Exact Name of Registrant as Specified in Charter)
Michigan 0-14611 38-1557359
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
12501 Grand River
Brighton, Michigan 48116
(Address of Principal Executive Offices) (Zip Code)
(248) 213-3899
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
- ---------------------
Fretter, Inc. (the "Company") is filing herewith the Monthly Operating
Reports of Debtors and Debtors in Possession for the Period Ended October 31,
1998 that the Company filed with the United States Bankruptcy Court for Northern
District of Ohio, Eastern Division on November 20, 1998 in connection with the
Company's ongoing proceeding under chapter 11 of the United States Bankruptcy
Code (11 U.S.C. Sections 101-1330), Case No. 96-15177.
Item 7. Exhibits.
- ------------------
(c) Exhibits.
--------
99.1 Monthly Operating Reports of Debtors and Debtors in Possession
for the Period Ended October 31, 1998 (1)
- -------------
(1) The Company agrees to furnish supplementally a copy of any omitted schedule
or similar attachment to the Commission upon its request.
<PAGE>
SIGNATURES
----------
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.
FRETTER, INC.
By /s/ J. Michael McLean
--------------------------------------
J. Michael McLean
Controller
Date: December 1, 1998
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Document Description
- --------- --------------------------------------------
<S> <C>
99.1 Monthly Operating Reports of Debtors and
Debtors in Possession for the Period Ended
October 31, 1998
=======================================================
</TABLE>
<PAGE>
EXHIBIT 99.1
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS FOR
THE PERIOD ENDED: 10-31-98
IN RE: :
CASE NO: 96-15177
Fretter, Inc. : Chapter 11
Judge Morgenstern-Clarren
:
- ------------------------------------
Debtor
:
As debtor in possession, I affirm:
1. That I have reviewed the financial statements attached hereto, consisting
of:
X Operating Statement (Form 2)
-----
X Balance Sheet (Form 3)
-----
X Summary of Operations (Form 4)
-----
X Monthly Cash Statements (Form 5)
-----
X Statement of Compensation (Form 6)
-----
----- -----------------------------------------
and that they have been prepared in accordance with normal and customary
accounting practices, and fairly and accurately reflect the debtor's financial
activity for the period stated:
2. That the insurance as described in Section 4 of the Operating Instructions
and Reporting Requirements for Chapter 11 Cases is in effect; and, (if not,
attach written explanation)
3. That all postpetition taxes as described in Sections 1 and 14 of the
Operating Instructions and Reporting Requirements For Chapter 11 cases are
current. (If not, attach written explanation)
4. No professional fees (attorney, accountant, etc.) have been paid without
specific court authorization. Explain on separate sheet if not true.
I hereby certify, under penalty of perjury, that the information provided herein
is true and correct to the best of my information and belief.
Dated: 11/16/98 /s/ J. Michael McLean
--------------------------
Debtor in Possession
Controller 248-213-3899
---------- ------------
Title Phone
<PAGE>
OPERATING STATEMENT (P&L)
-------------------------
(Accrual Basis)
---------------
Debtor: Fretter, Inc. Case No: 96-15177
Month Ending: 10/31/98
<TABLE>
<CAPTION>
Total
Current Month Since Filing
<S> <C> <C>
Total Revenue/Sales 0 532,663
Cost of Sales 0 505,226
----------- -----------
Gross Profit 0 27,437
=========== ===========
EXPENSES:
--------
Officer Compensation 8,744 364,756
Salary Expenses other Employees 5,917 445,779
Court-Ordered Stay Bonus 0 220,081
Employee Benefits & Pensions 0
Payroll Taxes 650 82,776
Other Taxes 87,574
Rent and Lease Expense (3,233) 108,628
Interest Expense 0 4,340,722
Insurance 6,185 634,722
Automobile and Truck Expense 0
Utilities (gas, electric, phone, alarms) 1,100 173,070
Computer Service Bureau 1,333 30,698
Travel and Entertainment 0 22,644
Repairs and Maintenance 798 310,160
Advertising 0
Supplies, Office Expenses, etc. 11,839 444,929
Other: Specify Director & Trustee Fees 6,566 181,729
Other: Other Fees 2,400 26,939
----------- -----------
TOTAL EXPENSES: 42,299 7,475,207
----------- -----------
NET OPERATING PROFIT/(LOSS) (42,299) (7,447,770)
=========== ===========
Add: Non-Operating Income:
Interest Income 7,730 59,246
Gain/Loss on Sale of Real Estate 3,000 8,722,062
Other Income 392 2,060,128
----------- -----------
TOTAL 11,122 10,841,436
----------- -----------
Less: Non-Operating Expenses:
Professional Fees 198,589 4,554,075
Other 0 645,106
----------- -----------
NET INCOME / (LOSS) (229,766) (1,805,515)
=========== ===========
</TABLE>
<PAGE>
BALANCE SHEET
-------------
Debtor: Fretter, Inc. Case No: 96-15177
Month Ending: 10/31/98
<TABLE>
<CAPTION>
ASSETS: Current Month Prior Month At Filing
<S> <C> <C> <C>
Cash: 2,520,281 2,021,981 89,252
Inventory: 791,999
Accounts Receivable: ** 4,005,203 34,272,947* 35,930,804*
Insider Receivables 3,555,136 3,555,136 7,424,547
Land and Buildings: 4,896,803 4,896,803 49,365,801
Furniture, Fixtures & Equip. 418,000
Accumulated Depreciation (921,700) (921,700) (10,623,681)
Other: Prepaids & misc. 2,624,827 2,831,511 807,689
Other: Utility deposits 9,865 9,865
----------- ----------- -----------
TOTAL ASSETS: 16,690,415 46,666,543 84,204,411
=========== =========== ===========
LIABILITIES:
Postpetition Liabilities:
Accounts Payable: 0 31,976
Wages and Salaries: 7,119 7,696
Taxes Payable 618 828
Other: Prof. fees, interest, etc. 3,163,461 3,110,351 1,390
----------- ----------- -----------
TOTAL Postpetition Liab.: 3,171,198 3,150,851 1,390
=========== =========== ===========
Secured Liabilities:
Subject to Postpetition
Collateral or Financing Order 0 0 29,002,401
All Other Secured Liab. 0 0 7,371,875
----------- ----------- -----------
TOTAL Secured Liabilities: 0 0 36,374,276
=========== =========== ===========
Prepetition Liabilities:
Taxes & Other Priority Liab. 630,152 630,152 1,132,770
Unsecured Liabilities 6,316,377 6,289,628 6,849,397
Other: Accrued Liabilities 4,280,508 4,281,422 5,449,917
----------- ----------- -----------
TOTAL Prepetition Liab. 11,227,037 11,201,202 13,432,084
=========== =========== ===========
Redeemable Preferred Stock 48,265,040 48,265,040 48,265,040
----------- ----------- -----------
Equity:
Owners' Capital: 1,692,451 1,692,451 1,692,451
Retained Earnings-Pre Pet. (45,859,796) (16,067,252) (15,560,830)
Retained Earnings-Post Pet. (1,805,515) (1,575,749) 0
----------- ----------- -----------
TOTAL Equity: (45,972,860) (15,950,550) (13,868,379)
=========== =========== ===========
TOTAL LIABILITIES
AND EQUITY: 16,690,415 46,666,543 84,204,411
=========== =========== ===========
</TABLE>
______________________________
* Includes contingent receivable from Silo, Inc.,
collectibility indeterminate.
** Amounts due from subsidiary companies, collectibility
indeterminate.
<PAGE>
SUMMARY OF OPERATIONS
---------------------
Period Ended: 10/31/98
Debtor: Fretter, Inc. Case No: 96-15177
Schedule of Postpetition Taxes Payable
--------------------------------------
<TABLE>
<CAPTION>
Beginning Accrued/ Payments/ Ending
Balance Withheld Deposits Balance
--------- -------- --------- -------
<S> <C> <C> <C> <C>
Income Taxes Withheld:
Federal: 0 2,522 2,522 0
State: 747 618 747 618
Local:
FICA Withheld: 0 650 650 0
Employers FICA: 0 650 650 0
Unemployment Tax:
Federal: 0 0 0 0
State: 80 0 80 0
Sales, Use & Excise Taxes 0 0
Property Taxes 0 0 0 0
Workers' Compensation
Other:
--- ----- ----- ---
TOTALS 827 4,440 4,649 618
=== ===== ===== ===
</TABLE>
AGING OF ACCOUNTS RECEIVABLE
AND POSTPETITION ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
Age in Days 0-30 30-60 Over 60
<S> <C> <C> <C>
PostPetition
Accounts Payable
----- ----- ----------
Accounts Receivable 7,560,339
----- ----- ==========
</TABLE>
For all postpetition accounts payable over 30 days old, please attach a sheet
listing each such account, to whom the account is owed, the date the account was
opened, and the reason for non payment of the account.
Describe events or factors occurring during this reporting period materially
affecting operations and formulation of a plan of Reorganization.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
MONTHLY CASH STATEMENT
Debtor: Fretter, Inc. Statement for the period:
Case #: 96-15177 From: 10-1-98 To: 10-31-98
Cash Activity Analysis (Cash Basis Only):
<TABLE>
<CAPTION>
General Payroll Tax Cash Coll. B.T.
Acct. Acct. Acct. Acct. (B.T.) Direct(1)
------- ------- ----- ------------ ---------
<S> <C> <C> <C> <C> <C>
A. Beginning Balance: 63,234.79 5,500.04 3,919.22 0.00 0.00
---------- --------- --------- ---------- ----------
B. Receipts. Attach
Separate Schedule: 553,391.95 11,921.42 3,847.73 0.00 0.00
---------- --------- --------- ---------- ----------
C. Balance Available
(A + B): 616,626.74 17,421.46 7,766.95 0.00 0.00
---------- --------- --------- ---------- ----------
D. Less Disbursements
Attach separate
schedule: 537,681.23 11,247.88 4,649.32 0.00 0.00
---------- --------- --------- ---------- ----------
E. Ending Balance
(C-D) 78,945.51 6,173.58 3,117.63 0.00 0.00
---------- --------- --------- ---------- ----------
(PLEASE ATTACH COPIES OF MOST RECENT RECONCILED BANK STATEMENTS FROM EACH
ACCOUNT):
General Account:
1. Depository Name & Location Michigan National Bank, Brighton, MI
2. Account Number 4707-38120-0
Payroll Account:
1. Depository Name & Location Michigan National Bank, Brighton, MI
2. Account Number 4707-38024-4
Tax Account:
1. Depository Name & Location Michigan National Bank, Brighton, MI
2. Account Number 4707-38128-3
</TABLE>
Other monies on hand (specify type and location) (i.e., CD's petty cash):
BT Collateral Acct. - Old Kent Bank, Acct. No 229377
BT Direct - BT cash collateral is forwarded directly to B.T.
Date:
------------------ -----------------------
Debtor in Possession
<PAGE>
MONTHLY CASH STATEMENT
----------------------
Debtor: Fretter, Inc. Statement for the period:
-------------
Case No.: 96-15177 From: 10-1-98 To: 10-31-98
------------- ------------- -----------
Cash Activity Analysis (Cash Basis Only):
<TABLE>
<CAPTION>
General Tax Certificate
Savings Savings of
Acct. Acct. Deposit
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
A. Beginning Balance: 87,962.37 0.00 1,861,364.61
---------- ---------- ------------ ---------- ----------
B. Receipts. Attach Separate Schedule: 292.77 0.00 482,437.50
---------- ---------- ------------ ---------- ----------
C. Balance Available (A+B): 88,255.14 0.00 2,343,802.11 0.00 0.00
---------- ---------- ------------ ---------- ----------
D. Less Disbursements Attach separate
schedule: 12.75 0.00
---------- ---------- ------------ ---------- ----------
E. Ending Balance (C-D): 88,242.39 0.00 2,343,802.11 0.00 0.00
---------- ---------- ------------ ---------- ----------
</TABLE>
(PLEASE ATTACH COPIES OF MOST RECENT RECONCILED BANK STATEMENTS FROM EACH
ACCOUNT)
General Savings Account
1. Depository Name & Location Michigan National Bank, Brighton, MI
----------------------------------------
2. Account Number 4707-38293-5
----------------------------------------
Tax Savings Account
1. Depository Name & Location Michigan National Bank, Brighton, MI
----------------------------------------
2. Account Number 4707-38357-8
----------------------------------------
Certificate of Deposit
1. Depository Name & Location Michigan National Bank, Brighton, MI
----------------------------------------
2. Account Number 880976, 880984, 880985
----------------------------------------
Other monies on hand (specify type and location)(i.e., CD's petty cash):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date:
-------------------- ----------------------------------------
Debtor in Possession
<PAGE>
MONTHLY STATEMENT OF COMPENSATION
---------------------------------
The following information is to be provided for each shareholder,
officer, director, manager, insider, or owner that is employed by the debtor in
possession. Attach additional pages if necessary.
Name: J. Michael McLean Capacity: Principal
------
X Officer
------
Director
------
Insider
------
Detailed Description of Duties: As Controller, directs accounting, payroll,
benefit plans and tax filings as well as assists in cash flow planning
Current Compensation Paid:
Weekly or Monthly
9,167.00
------ --------
Current Benefits Received:
Weekly or Monthly
Vacation Pay ------ --------
Holiday Pay ------ --------
Retirement ------ --------
Company Vehicle ------ --------
Entertainment ------ --------
Travel ------ --------
Other Benefits ------ --------
CURRENT TOTAL:
Weekly or Monthly
------ --------
Dated: -------------------------------------
Principal, Officer, Director, Insider
<PAGE>
LIST OF OMITTED SCHEDULES
1. Schedule of Michigan National Bank October 1998 Cash Receipts (Account
Number 4707-38120-0)
2. Schedules of Michigan National Bank October 1998 Cash Disbursements, Account
Reconciliation and Outstanding Check List (Account Number 4707-38120-0)
3. Michigan National Bank Statement of Account for the Period October 1, 1998
to October 31, 1998 (Account Number 4707-38120-0)
4. Michigan National Bank Statement of Account for the Period October 1, 1998
to October 31, 1998 (Account Number 4707-38024-4)
5. Schedules of Michigan National Bank Payroll Account October 1998 Cash
Receipts and Disbursements and Account Reconciliation (Account Number 4707-
38024-4)
6. Schedules of Michigan National Bank Tax Account October 1998 Cash Receipts
and Disbursements and Account Reconciliation (Account Number 4707-38128-3)
7. Michigan National Bank Statement of Account for the Period October 1, 1998
to October 31, 1998 (Account Number 4707-38128-3)
8. Schedule of Bankers Trust October 1998 Cash Receipts
9. Schedules of Michigan National Bank General Savings Account October 1998
Cash Receipts and Disbursements (Account Number 4707-38293-5)
10. Michigan National Bank Statement of Account for the Period October 1, 1998
to October 31, 1998 (Account Number 4707-38293-5)
11. Schedule of Michigan National Bank Certificate of Deposit October 1998
Cash Receipts
