<PAGE>
As filed with the Securities and Exchange Commission on September 25, 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) September 18, 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 August 31,
1998 that the Company filed with the United States Bankruptcy Court for Northern
District of Ohio, Eastern Division on September 18, 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 August 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: September 25, 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
August 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: 8-31-98
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: 9/14/98 /s/ J. Michael McLean
--------------------------
Debtor in Possession
Controller 810-220-5007
---------- ------------
Title Phone
<PAGE>
OPERATING STATEMENT (P&L)
-------------------------
(Accrual Basis)
---------------
Debtor: Fretter, Inc. Case No: 96-15177
Month Ending: 8/31/98
<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 8,744 348,079
Salary Expenses other Employees 5,547 433,558
Court-Ordered Stay Bonus 2,000 219,081
Employee Benefits & Pensions 0
Payroll Taxes 973 81,395
Other Taxes 87,574
Rent and Lease Expense 2,500 109,361
Interest Expense 0 4,340,722
Insurance 12,344 620,852
Automobile and Truck Expense 0
Utilities (gas, electric, phone, alarms) 1,200 170,870
Computer Service Bureau 1,333 28,032
Travel and Entertainment 1,913 22,082
Repairs and Maintenance 1,697 309,362
Advertising 0
Supplies, Office Expenses, etc. 13,331 421,621
Other: Specify Director & Trustee Fees 6,566 168,597
Other: Other Fees 2,420 21,824
----------- -----------
TOTAL EXPENSES: 60,568 7,383,010
----------- -----------
NET OPERATING PROFIT/(LOSS) (60,568) (7,355,573)
=========== ===========
Add: Non-Operating Income:
Interest Income 93 42,711
Gain/Loss on Sale of Real Estate 22,941 8,718,062
Other Income 90,428 2,059,563
----------- -----------
TOTAL 113,462 10,820,336
----------- -----------
Less: Non-Operating Expenses:
Professional Fees 157,726 4,306,308
Other 0 645,106
----------- -----------
NET INCOME / (LOSS) (104,832) (1,486,651)
=========== ===========
</TABLE>
<PAGE>
BALANCE SHEET *
-------------
Debtor: Fretter, Inc. Case No: 96-15177
Month Ending: 8/31/98
<TABLE>
<CAPTION>
ASSETS: Current Month Prior Month At Filing
<S> <C> <C> <C>
Cash: 1,952,926 1,139,603 89,252
Inventory: 791,999
Accounts Receivable: ** 34,307,620 34,307,170 35,930,804
Insider Receivables 3,555,136 3,555,136 7,424,547
Land and Buildings: 4,896,803 5,677,266 49,365,801
Furniture, Fixtures & Equip. 418,000
Accumulated Depreciation (921,700) (942,485) (10,623,681)
Other: Prepaids & misc. 2,818,891 2,823,566 807,689
Other: Utility deposits 9,865 9,865
----------- ----------- -----------
TOTAL ASSETS: 46,619,541 46,570,121 84,204,411
=========== =========== ===========
LIABILITIES:
Postpetition Liabilities:
Accounts Payable: 32,135 49,048
Wages and Salaries: 9,446 5,211
Taxes Payable 665 836
Other: Prof. fees, interest, etc. 2,918,079 2,739,085 1,390
----------- ----------- -----------
TOTAL Postpetition Liab.: 2,960,325 2,794,180 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 6,308,628 6,308,628 6,849,397
Other: Accrued Liabilities 4,345,017 4,356,910 5,449,917
----------- ----------- -----------
TOTAL Prepetition Liab. 11,283,797 11,295,690 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. (16,095,421) (16,095,421) (15,560,830)
Retained Earnings-Post Pet. (1,486,651) (1,381,819) 0
----------- ----------- -----------
TOTAL Equity: (15,889,621) (15,784,789) (13,868,379)
=========== =========== ===========
TOTAL LIABILITIES
AND EQUITY: 46,619,541 46,570,121 84,204,411
=========== =========== ===========
</TABLE>
______________________________
* Preliminary Estimate
** Includes contingent receivable from Silo, Inc.
Collectibility indeterminate
<PAGE>
SUMMARY OF OPERATIONS
---------------------
Period Ended: 8/31/98
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 2,341 2,341 0
State: 756 585 756 585
Local:
FICA Withheld: 0 973 973 0
Employers FICA: 0 973 973 0
Unemployment Tax:
Federal: 0 0 0 0
State: 80 0 0 80
Sales, Use & Excise Taxes 0 0
Property Taxes 0 0 0 0
Workers' Compensation
Other:
--- ----- ----- ---
TOTALS 836 4,872 5,043 665
=== ===== ===== ===
</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 2,420 29,715
----- ----- ----------
Accounts Receivable 37,862,756
----- ----- ==========
</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>
AGING
POST-PETITION PAYABLES OVER 30 DAYS
8/31/98
LEONARD ARCHIVES, INC. 2,966 BILL RECONCILIATION
POST-PETITION SERVICE
CONTRACT REPAIR CLAIM 26,749 PAYMENT TIMING WILL BE PART OF FINAL PLAN
------
29,715
======
<PAGE>
MONTHLY CASH STATEMENT
Debtor: Fretter, Inc. Statement for the period:
Case #: 96-15177 From: 8-1-98 To: 8-31-98
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: 94,387.59 8,487.12 6,275.21 0.00 0.00
---------- --------- --------- ---------- ----------
B. Receipts. Attach
Separate Schedule: 903,121.93 9,845.60 4,872.87 0.00 0.00
---------- --------- --------- ---------- ----------
C. Balance Available
(A + B): 997,509.52 18,332.72 11,148.08 0.00 0.00
---------- --------- --------- ---------- ----------
D. Less Disbursements
Attach separate
schedule: 939,708.36 9,845.60 5,043.97 0.00 0.00
---------- --------- --------- ---------- ----------
E. Ending Balance
(C-D) 57,801.16 8,487.12 6,104.11 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: 8-1-98 To: 8-31-98
------------- ------------- -----------
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: 27,828.18 0.00 1,002,624.99
---------- ---------- ------------ ---------- ----------
B. Receipts. Attach Separate Schedule: 92.62 0.00 850,000.00
---------- ---------- ------------ ---------- ----------
C. Balance Available (A+B): 27,920.80 0.00 1,852,624.99 0.00 0.00
---------- ---------- ------------ ---------- ----------
D. Less Disbursements Attach separate
schedule: 12.16 0.00
---------- ---------- ------------ ---------- ----------
E. Ending Balance (C-D): 27,908.64 0.00 1,852,624.99 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 August 1998 Cash Receipts (Account
Number 4707-38120-0)
2. Schedules of Michigan National Bank August 1998 Cash Disbursements,
Account Reconciliation and Outstanding Check List (Account Number 4707-38120-0)
3. Michigan National Bank Statement of Account for the Period August 1, 1998
to August 31, 1998 (Account Number 4707-38120-0)
4. Michigan National Bank Statement of Account for the Period August 1, 1998
to August 31, 1998 (Account Number 4707-38024-4)
5. Schedules of Michigan National Bank Payroll Account August 1998 Cash
Receipts and Disbursements and Account Reconciliation (Account Number 4707-
38024-4)
6. Schedules of Michigan National Bank Tax Account August 1998 Cash Receipts
and Disbursements and Account Reconciliation (Account Number 4707-38128-3)
7. Michigan National Bank Statement of Account for the Period August 1, 1998
to August 31, 1998 (Account Number 4707-38128-3)
8. Schedule of Bankers Trust August 1998 Cash Receipts
9. Schedules of Michigan National Bank General Savings Account August 1998
Cash Receipts and Disbursements (Account Number 4707-38293-5)
10. Michigan National Bank Statement of Account for the Period August 1, 1998
to August 31, 1998 (Account Number 4707-38293-5)
11. Schedule of Michigan National Bank Certificate of Deposit August 1998 Cash
Receipts
