<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
March 5, 1999
Solo Serve Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
<TABLE>
<S> <C>
0-19994 74-2048057
(Commission File Number) (I.R.S. Employer Identification Number)
</TABLE>
1610 Cornerway Blvd.
San Antonio, Texas 78219
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(210) 662-6262
<PAGE> 2
ITEM 5. OTHER EVENTS
As reported in the Form 8-K for January 20, 1999, Solo Serve
Corporation (the "Company") filed a voluntary petition on January 20, 1999
under Chapter 11 of the Bankruptcy Code, Case No. 99-50272-C (the "Filing"), in
the United States Bankruptcy Court, Western District of Texas, San Antonio
Division, Bankruptcy Judge Ronald B. King presiding (the "Bankruptcy Court").
Since the Filing, Solo Serve Corporation, has acted as Debtor in Possession and
continued to operate and manage its affairs.
The Company filed Schedules and Statements with the Bankruptcy Court.
The Schedules and Statements disclosed that the Company holds no real property,
and that the then current market value of the Company's interest in personal
property (without any adjustment for liens) included $167,051 cash on hand;
$579,473.67 in financial accounts and credit card receipts; $588,403 in
security deposits; an interest of unknown value in certain insurance and risk
management policies; $86,882 in accounts receivable; $112,459 in liquidated
debts; trademarks and software licenses of unknown value; supplies at cost
value of $122,542; net book value of $1,575,393 in furniture, fixtures, and
equipment; net book value of $1,308,433 in leasehold improvements; inventory at
cost value of $7,867,697; and certain other deposits and prepaid expenses and
expected refunds totaling $274,914. The Schedules and Statements also listed
liabilities including $6,371,120.79 in secured claims and $11,099,200.43 in
unsecured nonpriority claims. The Summary of Schedules filed with the
Bankruptcy Court is attached to this Report as Exhibit 99.1. A complete copy of
the Schedules and Statements, the exhibits and attachments thereto, and other
pleadings may be obtained by contacting the Office of the Clerk of the United
States Bankruptcy Court for the Western District of Texas, San Antonio
Division, 615 E. Houston Street, San Antonio, Texas 78205, (210) 472-6720.
Inventory Liquidation
Pursuant to the Agency Agreement between the Company and
Hillco/Garcel/Nassi, liquidation of the inventory in the Company's stores has
continued. It is anticipated that the inventory liquidation will be concluded
and stores will be turned back to the Company on or about March 29, 1999. The
proceeds of the inventory liquidation have been applied to reduce the
outstanding balance on the Company's secured debt to Sanwa, which has now been
paid in full. Excess proceeds will be utilized to provide funds necessary for
continuing operation of the Company on a reduced scale while the Company
continues to seek to maximize the value of its assets for the benefit of its
creditors. Other than employees in the stores, the Company currently has
fourteen full-time employees, as compared to 78 full-time employees on January
15, 1999.
Other Assets
The Company pursued a number of alternatives with regard to its store
leases, some of which contemplated continued operation of the stores under new
ownership. However, no final proposal contemplating continued operations was
submitted, and the Company has engaged Keen Realty as its real estate
consultant to work with the Company to dispose of twenty store leases. In an
order entered March 5, 1999, the Bankruptcy Court approved auction procedures
<PAGE> 3
and set a March 24, 1999 auction date for the twenty store leases in an order
entered March 5, 1999. In that regard, bids are due on the subject store leases
on March 18, 1999, with the auction to be held on March 24, 1999 before the
Bankruptcy Court. The leases in question include ten San Antonio leases, two
Austin leases, two Corpus Christi leases, two leases along the U.S./Mexico
Border, and four leases in Louisiana.
The Company has entered into a Lease Termination Agreement providing
for the termination of the lease relating to its McAllen store. The court has
approved the Termination Agreement, which contemplates a payment of $50,000 to
the Company in exchange for termination of the lease. The Company also has
filed a motion seeking approval of the sale and assignment by the Company of
two leases in New Orleans to Michael's Stores for aggregate consideration of
$300,000. A hearing is scheduled on this motion for March 23, 1999.
With regard to its distribution center, the Company has entered into a
Lease Termination Agreement with Koontz/McCombs, the Company's Distribution
Center Landlord, providing for the payment to the Company of $150,000 in
exchange for termination of the lease. Under the Agreement, the Company can
continue to occupy the premises through the end of July, 1999 unless Koontz
McCombs gives notice prior to that time requiring the Company to vacate the
premises. Any such notice would give the Company thirty days to vacate the
premises and cannot require the Company to vacate the premises prior to April
30, 1999.
The Company has also sought and obtained an order authorizing the sale
of the furniture, fixtures and equipment in the Company's stores and in the
distribution center on terms set forth in the Motion. Generally, the
liquidation of furniture, fixture and equipment requires that certain minimum
amounts be realized for the furniture, fixture and equipment at specific store
locations and at the Distribution Center. The Company is continuing its efforts
to liquidate these assets on terms consistent with the Court's order.
The Bankruptcy Court has established a date by which all claims
against the Company must be filed. Thereafter the court will determine the
validity, amount and priority of the claims submitted. Funds remaining after
liquidation of the assets and payment of secured administrative and/or priority
claims, if any, would be allocated to the Company's unsecured creditors in
proportion to the amounts of their respective allowed claims. No assurance can
be given as to the amount, if any, that will be available to be allocated to
the Company's unsecured creditors. No value will be afforded to the interests
of the holders of the Company's Common Stock or Preferred Stock.
Forward-looking Statements
Forward-looking statements in this Report are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
There are certain important factors that could cause results to differ
materially from those anticipated by some of the statements made above.
Investors are cautioned that all forward-looking statements involve risks and
uncertainty. Among the principal uncertainties facing the Company at this time
are uncertainty regarding the amounts likely to be realized from sale of the
Company's remaining assets and the costs associated with the bankruptcy
process. The Company does not undertake to
<PAGE> 4
publicly update or revise its forward-looking statements even if experience or
future changes make it clear that any projected results expressed or implied
therein will not be realized.
Copies of the bankruptcy petition and other pleadings may be obtained
by contacting the Office of the Clerk of the United States Bankruptcy Court for
the Western District of Texas, San Antonio Division, 615 E.
Houston Street, San Antonio, Texas 78205, (210) 472-6720.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
There are no financial statements filed with this report.
(c) Exhibits. The following exhibits are filed as part of this report:
<TABLE>
<CAPTION>
Number Document
<S> <C>
99.1 Summary of Schedules of the Company, as filed with
the Bankruptcy Court on February 25, 1999.
</TABLE>
<PAGE> 5
SIGNATURES
Pursuant to the requirement 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.
SOLO SERVE CORPORATION
By: /s/ Ross E. Bacon
----------------------------
Ross E. Bacon,
Secretary and Chief Financial Officer
Dated: March 5, 1999
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document
------- --------
<S> <C>
99.1 Summary of Schedules of the Company, as filed with
the Bankruptcy Court on February 25, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
United States Bankruptcy Court
Western District of Texas
SUMMARY OF SCHEDULES
Indicate as to each schedule whether that schedule is attached and state the
number of pages in each. Report the totals from Schedules A, B, D, E, F, I, and
J in the boxes provided. Add the amounts from Schedules A and B to determine
the total amount of the debtor's assets Add the amounts from Schedules D, E,
and F to determine the total amount of the debtor's
liabilities.
<TABLE>
<CAPTION>
----------------------------------------------------------
AMOUNTS SCHEDULED
- ----------------------------------------------------------------------------------------------------------------------------------
NAME OF SCHEDULE ATTACHED (YES/NO) NO. OF SHEETS ASSETS LIABILITIES OTHER
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
YES 1 $0.00
A-REAL PROPERTY
- ----------------------------------------------------------------------------------------------------------------------------------
YES 3 UNDETERMINED
B-PERSONAL PROPERTY
- ----------------------------------------------------------------------------------------------------------------------------------
YES 1
C-PROPERTY CLAIMED AS EXEMPT
- ----------------------------------------------------------------------------------------------------------------------------------
D-CREDITORS HOLDING YES 2 $6,371,120.79
SECURED CLAIMS
- ----------------------------------------------------------------------------------------------------------------------------------
E-CREDITORS HOLDING UNSECURED YES 272 UNDETERMINED
PRIORITY CLAIMS
- ----------------------------------------------------------------------------------------------------------------------------------
F-CREDITORS HOLDING UNSECURED YES 96 $11,099,200.43
NONPRIORITY CLAIMS
- ----------------------------------------------------------------------------------------------------------------------------------
G-EXECUTORY CONTRACTS AND YES 10
UNEXPIRED LEASES
- ----------------------------------------------------------------------------------------------------------------------------------
YES 1
H-CODEBTORS
- ----------------------------------------------------------------------------------------------------------------------------------
I-CURRENT INCOME OF N/A 0 N/A
INDIVIDUAL DEBTOR(S)
- ----------------------------------------------------------------------------------------------------------------------------------
J-CURRENT EXPENDITURES OF N/A 0 N/A
INDIVIDUAL DEBTOR(S)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF SHEETS 386
OF ALL SCHEDULES
-------------------------------------------------------------------------------
TOTAL ASSETS UNDETERMINED
----------------------------------------------------------
TOTAL LIABILITIES UNDETERMINED
----------------------
</TABLE>
<PAGE> 2
EXHIBIT 99.1
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
<PAGE> 3
SCHEDULE A - REAL PROPERTY
Except as directed below, list all real property in which the debtor has
any legal, equitable, or future interest, including all property owned as a
co-tenant, community property, or in which the debtor has a life estate.
Include any property in which the debtor holds rights and powers exercisable
for the debtor's own benefit. If the debtor is married, state whether husband,
wife, or both own the property by placing an "H," "W," "J," or "C" in the
column labeled "HWJC" (Husband, Wife, Joint, or Community). If the debtor holds
no interest in real property, write "None" under "Description and Location of
Property."
DO NOT INCLUDE INTERESTS IN EXECUTORY CONTRACTS AND UNEXPIRED LEASES ON
THIS SCHEDULE. LIST THEM IN SCHEDULE G - EXECUTORY CONTRACTS AND UNEXPIRED
LEASES.
If an entity claims to have a lien or hold a secured interest in any
property, state the amount of the secured claim See Schedule D. If no entity
claims to hold a secured interest in the property, write "None" in the column
labeled "Amount of Secured Claim."
If the debtor is an individual or if a joint petition is filed, state the
amount of any exemption claimed in the property only in Schedule C - Property
Claimed as Exempt.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
H
CURRENT
W MARKET VALUE OF DEBTOR'S
INTEREST IN PROPERTY,
DESCRIPTION AND LOCATION NATURE OF DEBTOR'S INTEREST IN J WITHOUT DEDUCTING ANY AMOUNT OF
OF PROPERTY PROPERTY SECURED CLAIM OR SECURED CLAIM
C EXEMPTION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL $0.00
--------------------------
(REPORT ALSO ON SUMMARY OF SCHEDULES)
</TABLE>
<PAGE> 4
SCHEDULE B - PERSONAL PROPERTY
Except as directed below, list all personal property of the debtor of
whatever kind. If the debtor has no property in one or more of the categories,
place an "x" in the appropriate position in the column labeled "None." If
additional space is needed in any category, attach a separate sheet property
identified with the case name, case number, and the number of the category. If
the debtor is married, state whether husband, wife, or both own the property by
placing an "H," "W," "J," or "C" in the column labeled "HWJC" (Husband, Wife,
Joint, or Community). If the debtor is an individual, state the amount of any
exemptions claimed in Schedule C - Property Claimed as Exempt.
DO NOT INCLUDE INTERESTS IN EXECUTORY CONTRACTS AND UNEXPIRED LEASES ON
THIS SCHEDULE. LIST THEM IN SCHEDULE G - EXECUTORY CONTRACTS AND UNEXPIRED
LEASES.
If the property is being held for the debtor by someone else, state that
person's name and address under "Description and Location of Property."
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
H
W CURRENT
MARKET VALUE OF DEBTOR'S
J INTEREST IN PROPERTY,
TYPE OF PROPERTY NONE DESCRIPTION AND LOCATION WITHOUT DEDUCTING ANY
OF PROPERTY C SECURED CLAIM OR EXEMPTION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
1. Cash on hand. VAULT ROOM, PETTY CASH $167,051.00
- ---------------------------------------------------------------------------------------------------------------------------------
2. Checking, savings or other financial BANK ACCOUNTS $579,473.67
accounts, certificates of deposit, or
shares in banks, savings and loan,
thrift, building and loan, and homestead
associations or credit unions, brokerage
houses, or cooperatives (INCLUDES CREDIT
CARD RECEIPTS).
- ---------------------------------------------------------------------------------------------------------------------------------
3. Security deposits with public SEE SCHEDULE B-1 $588,403
utilities, telephone companies,
landlords, and others.
- ---------------------------------------------------------------------------------------------------------------------------------
4. Household goods and furnishings, X $
including audio, video, and computer
equipment.
- ---------------------------------------------------------------------------------------------------------------------------------
5. Books, pictures and other art X $
objects, antiques, stamp, coin, record,
tape, compact disc, and other
collections or collectibles.
- ---------------------------------------------------------------------------------------------------------------------------------
6. Wearing apparel. X $
- ---------------------------------------------------------------------------------------------------------------------------------
7. Furs and jewelry. X $
- ---------------------------------------------------------------------------------------------------------------------------------
8. Firearms and sports, photographic, X $
and other hobby equipment.
- ---------------------------------------------------------------------------------------------------------------------------------
9. Interests in insurance policies Name WISENBERG INSURANCE AND RISK MANAGEMENT UNKNOWN
insurance company of each policy and POLICIES
itemize surrender or refund value of
each.
- ---------------------------------------------------------------------------------------------------------------------------------
10. Annuities. Itemize and name each X $
issuer.
- ---------------------------------------------------------------------------------------------------------------------------------
11. Interests in IRA, ERISA, Keogh, or X $
other pension or profit sharing plans.
Itemize.
- ---------------------------------------------------------------------------------------------------------------------------------
12. Stock and interests in incorporated X $
and unincorporated businesses. Itemize.
- ---------------------------------------------------------------------------------------------------------------------------------
13. Interests in partnerships or joint X $
ventures. Itemize.
- ---------------------------------------------------------------------------------------------------------------------------------
14. Government and corporate bonds and X $
other negotiable and non-negotiable
instruments.
- ---------------------------------------------------------------------------------------------------------------------------------
15. Accounts receivable. $86,882
- ---------------------------------------------------------------------------------------------------------------------------------
16. Alimony, maintenance, support, and X $
property settlements to which the debtor
is or may be entitled. Give particulars.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
H
W CURRENT
MARKET VALUE OF DEBTOR'S
J INTEREST IN PROPERTY,
TYPE OF PROPERTY NONE DESCRIPTION AND LOCATION WITHOUT DEDUCTING ANY
OF PROPERTY C SECURED CLAIM OR EXEMPTION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
17. Other liquidated debts owing debtor NOTE RECEIVABLE FANNIN SALES $65,810
including tax refunds. Give particulars. INCOME TAX REFUNDS LOUISIANA $46,649
- ---------------------------------------------------------------------------------------------------------------------------------
18. Equitable or future interests, life X $
estates, and rights or powers
exercisable for the benefit of the
debtor other than those listed in
Schedule of Real Property.
- ---------------------------------------------------------------------------------------------------------------------------------
19. Contingent and non-contingent X $
interests in estate of a decedent, death
benefit plan, life insurance policy, or
trust.
- ---------------------------------------------------------------------------------------------------------------------------------
20. Other contingent and unliquidated SALES TAX REFUND TEXAS $
claims of every nature, including tax FIRST DATA MERCHANTS, RESERVE $75,000
refunds, counterclaims of the debtor,
and rights to setoff claims. Give
estimated value of each.
- ---------------------------------------------------------------------------------------------------------------------------------
21. Patents, copyrights, and other TRADEMARKS AND TRADE NAMES UNKNOWN
intellectual property. Give particulars.
- ---------------------------------------------------------------------------------------------------------------------------------
22. Licenses, franchises, and other SOFTWARE LICENSES UNKNOWN
general intangibles. Give particulars.
- ---------------------------------------------------------------------------------------------------------------------------------
23. Automobiles, trucks, trailers, and
other vehicles and accessories.
- ---------------------------------------------------------------------------------------------------------------------------------
24. Boats, motors, and accessories. X $
- ---------------------------------------------------------------------------------------------------------------------------------
25. Aircraft and accessories. X $
- ---------------------------------------------------------------------------------------------------------------------------------
26. Office equipment, furnishings, and SUPPLIES (AT COST) $122,542
supplies.
- ---------------------------------------------------------------------------------------------------------------------------------
27. Machinery, fixtures, equipment, and FURNITURE, FIXTURES AND EQUIPMENT (AT NET BOOK $1,575,393
supplies used in business. VALUE) $1,308,433
LEASEHOLD IMPROVEMENTS (AT NET BOOK VALUE)
- ---------------------------------------------------------------------------------------------------------------------------------
28. Inventory. STORE INVENTORY AND DISTRIBUTION INVENTORY, AT $7,867,697
COST
- ---------------------------------------------------------------------------------------------------------------------------------
29. Animals. X $
- ---------------------------------------------------------------------------------------------------------------------------------
30. Crops - growing or harvested. Give X $
particulars.
- ---------------------------------------------------------------------------------------------------------------------------------
31. Farming equipment and implements. X $
- ---------------------------------------------------------------------------------------------------------------------------------
32. Farm supplies, chemicals, and feed. X $
- ---------------------------------------------------------------------------------------------------------------------------------
33. Other personal property of any kind WORKERS' COMP PREMIUM DEPOSIT $1,332
not already listed. Itemize. PREPAID INSURANCE $164,933
PREPAID EXPENSES $33,649
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL e UNDETERMINED
-----------------------
(Include amounts from any continuation sheets attached.
Report total also on Summary of Schedules.)
</TABLE>
<PAGE> 6
SCHEDULE C - PROPERTY CLAIMED AS EXEMPT
Debtor elects the exemptions to which debtor is entitled under:
(Check one box)
[ ] 11 U.S.C. Section 522(b)(1) Exemptions provided in 11 U.S.C. Section
522(d). Note: These exemptions are available
only in certain states.
[ ] 11 U.S.C. Section 522(b)(2) Exemptions available under applicable
nonbankruptcy federal laws, state or local
law where the debtor's domicile has been
located for the 180 days immediately
preceding the filing of the petition, or for
a longer portion of the 180-day period than
in any other place, and the debtor's
interest as a tenant by the entirety or
joint tenant to the extent the interest is
exempt from process under applicable
nonbankruptcy law.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
CURRENT
DESCRIPTION OF PROPERTY SPECIFY LAW PROVIDING VALUE OF CLAIMED EXEMPTION MARKET VALUE OF PROPERTY
EACH EXEMPTION WITHOUT DEDUCTING
EXEMPTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NONE $ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
SCHEDULE D - CREDITORS HOLDING SECURED CLAIMS
State the name, mailing address, including zip code, and account number, if
any, of all entities holding claims secured by property of the debtor as of the
date of filing of the petition. List creditors holding all types of secured
interests such as judgment liens, garnishments, statutory liens, mortgages,
deeds of trust, and other security interests. List creditors in alphabetical
order to the extent practicable. If all secured creditors will not fit on this
page, use the continuation sheet provided.
If any entity other than a spouse in a joint case may be jointly liable on
a claims, place an "X" in the column labeled "Codebtor," include the entity on
the appropriate schedule of creditors, and complete Schedule H - Codebtors. If
a joint petition is filed, state whether husband, wife, both of them or the
marital community may be liable on each claim by placing an "H," "W," "J," or
"C" in the column labeled "HWJC" (Husband, Wife, Joint, or Community).
If the claim is "Contingent," place a "C" in the column labeled "CUD"
(Contingent, Unliquidated, Disputed). If the claim is unliquidated, place an
"U" in the column labeled "CUD." If the claim is "Disputed," place an "D" in
the column labeled "CUD." (You may need to place a "C U and/or "D") in this
column.
Report the total of all claims listed on this schedule in the box labeled
"Total" on the last sheet of the completed schedule. Report this total also on
the Summary of Schedules.
[ ] Check this box if debtor has no creditors holding secured claims to
report on this Schedule D.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
C
O
D
E AMOUNT OF CLAIM
B H DATE CLAIM WAS INCURRED, C WITHOUT DEDUCTING
REDITOR'S NAME AND MAILING ADDRESS T W NATURE OF LIEN, AND U VALUE OF UNSECURED PORTION,
INCLUDING ZIP CODE O J DESCRIPTION AND VALUE OF PROPERTY D COLLATERAL IF ANY
R C SUBJECT TO LIEN
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
SANWA BUSINESS CREDIT CORP. OCTOBER 1998 $4,585,000
ONE SOUTH WACKER LINE OF CREDIT
CHICAGO, IL 60606 Inventory and any
unencumbered assets of
Solo Serve VALUE:
$7,867,697 (INVENTORY AT
COST) PLUS UNDETERMINED
VALUE OF REMAINING
COLLATERAL
- -----------------------------------------------------------------------------------------------------------------------------------
GENERAL ATLANTIC CORPORATION X SECOND LIEN ON SANWA'S COLLATERAL C $1,350,000
WASHINGTON MALL II, CHURCH ST VALUE: $7,867,697 (INVENTORY AT
P.O. BOX HM 2265 COST) PLUS UNDETERMINED VALUE OF
HAMILTON HMJX BERMUDA REMAINING COLLATERAL
- -----------------------------------------------------------------------------------------------------------------------------------
TEXAS AD VALOREM TAXES SEE SCHEDULE D-1 $436,120.79
------------------------------
VALUE: $
- -----------------------------------------------------------------------------------------------------------------------------------
------------------------------
VALUE: $
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL:
$6,371,120.79
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
SCHEDULE E - CREDITORS HOLDING UNSECURED PRIORITY CLAIMS
A complete list of claims entitled to priority, listed separately by type of
priority, is to be set forth on the sheets provided Only holders of claims
entitled to priority should be listed in this schedule. In the boxes provided on
the attached sheets, state the name and mailing address, including zip code, and
account number, if any, of all entities holding priority claims against the
debtor or the property of the debtor, as of the date of the filing of the
petition.
If any entity other than a spouse in a joint case may be jointly liable on
a claim, place an "X" in the column labeled "Codebtor," include the entity on
the appropriate schedule of creditors, and complete Schedule H - Codebtors. If
a joint petition is filed, state whether husband, wife, both of them, or the
marital community may be liable on each claim by placing an "H," "W," "J," or
"C" in the column labeled "H W J C" (Husband, Wife, Joint, or Community).
If the claim is "Contingent, place a "C" in the column labeled "CUD"
(Contingent, Disputed, Unliquidated). If the claim is "Unliquidated," place an
"U" in the column labeled "CUD." If the claim is "Disputed," place a "D" in the
column labeled "CUD." (You may need to place a "C U and/or D" in this column.)
Report the total of all claims listed on each sheet in the box labeled
"Subtotal" on each sheet. Report the total of all claims listed on this
Schedule E in the box labeled "Total" on the last sheet of the completed
schedule. Repeat this total also on the Summary of Schedules.
[ ] Check this box if debtor has no creditors holding unsecured priority
claims to report on this Schedule E.
TYPES OF PRIORITY:
[ ] EXTENSIONS OF CREDIT IN AN INVOLUNTARY CASE
Claims arising in the ordinary course of the debtor's business or
financial affairs after the commencement of the case but before the
earlier of the appointment of a trustee or the order for relief, 11 U.S.C.
Section 507(a)(2).
[X] WAGES, SALARIES, AND COMMISSIONS
Wages, salaries, and commissions, including vacation, severance, and sick
leave pay owing to employees up to a maximum of $4300 per employee, earned
within 90 days immediately preceding the filing of the original petition,
or the cessation of business, whichever occurred first, to the extent
provided in 11 U.S.C. Section 507(a)(3).
As of 2/23/99 Solo Serve Corporation does not believe any claims in
this category exist as a result of performance under Orders entered by
the Court post-petition allowing satisfaction of such claims. As a
result all claims listed in this category are contingent, unliquidated
and/or disputed.
SEE SCHEDULE E1 FOR LIST OF EMPLOYEES
[ ] CONTRIBUTIONS TO EMPLOYEE BENEFIT PLANS
Money owed to employee benefit plans for services rendered within 180 days
immediately preceding the filing of the original petition, or the
cessation of business, whichever occurred first, to the extent provided in
11 U.S.C. Section 507(a)(4).
[ ] CERTAIN FARMERS AND FISHERMEN
Claims of certain farmers and fishermen, up to a maximum of $2000 per
farmer or fisherman, against the debtor, as provided in 11 U.S.C.
Section 507(a)(5).
[X] DEPOSITS BY INDIVIDUALS
Claims of individuals up to a maximum of $900 for deposits for the
purchase, lease, or rental of property or services for personal, family, or
household use, that were not delivered or provided. 11 U.S.C. Section
507(a)(6).
CUSTOMER LAYAWAY DEPOSITS, AMOUNT UNKNOWN
[X] TAXES AND CERTAIN OTHER DEBTS OWED TO GOVERNMENTAL UNITS
Taxes, customs duties, and penalties owing to federal, state, and local
governmental units as provided for in 11 U.S.C. Section 507(a)(7).
SEE SCHEDULE E2 (EXCLUSIVE OF SALES TAX CLAIMS WHICH HAVE BEEN PAID
PURSUANT TO COURT ORDER)
271 CONTINUATION SHEET(S) ATTACHED
<PAGE> 9
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
State the name, mailing address, including zip code, and account number, if
any, of all entities holding unsecured claims without priority against the
debtor or the property of the debtor as of the date of filing of the petition.
Do not include creditors listed in Schedules D and E. If all creditors will not
fit on this page, use the continuation sheet provided.
If any entity other than a spouse in a joint case may be jointly liable on
a claim, place an "X" in the column labeled "Codebtor," include the entity on
the appropriate schedule of creditors, and complete Schedule H - Codebtors. If
a joint petition is filed, state whether husband, wife, both of them, or the
marital community may be liable on each claim by placing an "H," "W," "J," or
"C" in the column labeled "Husband, Wife, Joint, or Community."
If the claim is contingent, place and "X" in the column labeled
"Contingent." If the claim is unliquidated, place an "X" in the column labeled
"Unliquidated." If the claim is disputed, place an "X" in the column labeled
"Disputed." (You may need to place an "X" in more than one of these three
columns.)
Report the total of all claims listed on this schedule in the box labeled
"Total" on the last sheet of the completed schedule. Report this total also on
the Summary of Schedules.
[ ] Check this box if debtor has no creditors holding unsecured nonpriority
claims to report on this Schedule F.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
C
O
D
E H DATE CLAIM WAS INCURRED AND C
B W CONSIDERATION FOR CLAIM. IF CLAIM
CREDITOR'S NAME AND MAILING ADDRESS T J IS SUBJECT TO SETOFF, SO STATE. U TOTAL
INCLUDING ZIP CODE O C AMOUNT OF CLAIM
R D
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT NO.
- ----------------------------------------------------------------------------------------------------------------------------------
MERCHANDISE VENDORS - SEE ATTACHED SCHEDULE F1 OPEN ACCOUNTS (SOME ACCOUNTS MAY BE $8,189,118.70
DISPUTED OR SUBJECT TO OFFSET)
- ----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT NO.
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSE VENDORS - SEE ATTACHED SCHEDULE F2 OPEN ACCOUNTS (SOME ACCOUNTS MAY BE $2,282,049.30
DISPUTED OR SUBJECT TO OFFSET)
- ----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT NO.
- ----------------------------------------------------------------------------------------------------------------------------------
LITIGANTS - SEE ATTACHED SCHEDULE F3 $0
C
ALL SUCH CLAIMS ARE CONTINGENT, UNLIQUIDATED U
AND/OR DISPUTED. D
- ----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT NO.
- ----------------------------------------------------------------------------------------------------------------------------------
EMPLOYEES - SEE ATTACHED SCHEDULE F4 $58,032.43
- ----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT NO.
- ----------------------------------------------------------------------------------------------------------------------------------
CHARLES M. SIEGEL 10/97 $400,000
1610 CORNERWAY BLVD. NOTE PAYABLE
SAN ANTONIO, TX 78219
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
94 CONTINUATION SHEET(S) ATTACHED
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
SHARI KILLEBREW 10/97 $50,000
1610 CORNERWAY BLVD. NOTE PAYABLE
SAN ANTONIO, TX 78219
- ----------------------------------------------------------------------------------------------------------------------------------
DAWN RIBACK 10/97 $50,000
1610 CORNERWAY BLVD. NOTE PAYABLE
SAN ANTONIO, TX 78219
- ----------------------------------------------------------------------------------------------------------------------------------
BANK OF AMERICA ILLINOIS LETTER OF CREDIT - EXPIRES 2/01/2000 C $35,000
231 S. LASALLE ST.
CHICAGO, IL 60697
- ----------------------------------------------------------------------------------------------------------------------------------
LIBERTY MUTUAL INSURANCE CO. LETTER OF CREDIT - EXPIRES 2/01/2000 C $35,000
175 BERKELEY STREET
BOSTON, MA 02117
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL:
$11,099,200.43
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
SCHEDULE G - EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Describe all executory contracts of any nature an all unexpired leases or
real or personal property. Include any timeshare interests.
State nature of debtor's interest in contract, i.e., "Purchaser," "Agent,"
etc. State whether debtor is the lessor or lessee of a lease.
Provide the names and complete mailing addresses of all other parties to
each lease or contract described.
NOTE: A party listed on this schedule will not receive notice of the filing
of this case unless the party is also scheduled in the appropriate schedule of
creditors.
[ ] Check this box if debtor has no executory contracts or unexpired leases.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CONTRACT OR LEASE AND NATURE OF
NAME AND MAILING ADDRESS, INCLUDING ZIP CODE, DEBTOR'S INTEREST. STATE WHETHER LEASE IS FOR
OF OTHER PARTIES TO LEASE OR CONTRACT NONRESIDENTIAL REAL PROPERTY. STATE CONTRACT
NUMBER OF ANY GOVERNMENT CONTRACT
--------------------------------------------------------- -------------------------------------------------------
<S> <C>
--------------------------------------------------------- -------------------------------------------------------
LANDLORDS - SEE SCHEDULE G1 RETAIL LEASES - SEE SCHEDULE G-1
--------------------------------------------------------- -------------------------------------------------------
SERVICE PROVIDERS - SEE SCHEDULE G2 SEE SCHEDULE G-2
--------------------------------------------------------- -------------------------------------------------------
ROBERT GRIMM CONSULTING SERVICES AGREEMENT
--------------------------------------------------------- -------------------------------------------------------
COMPANY EMPLOYEES ASSOCIATE STOCK PURCHASE PLAN
--------------------------------------------------------- -------------------------------------------------------
</TABLE>
THE FOLLOWING AGREEMENTS ALSO EXIST WITH RESPECT TO SOLO SERVE CORPORATION.
SOLO SERVE CORPORATION IS LISTING THE FOLLOWING AGREEMENTS FOR INFORMATION
PURPOSES, BUT SUCH LISTING SHOULD NOT BE CONSTRUED TO BE A REPRESENTATION
AND/OR ADMISSION THAT SUCH AGREEMENTS ARE EXECUTORY CONTRACTS.
<TABLE>
<CAPTION>
--------------------------------------------------------- -------------------------------------------------------
DESCRIPTION OF CONTRACT OR LEASE AND NATURE OF
NAME AND MAILING ADDRESS, INCLUDING ZIP CODE, DEBTOR'S INTEREST. STATE WHETHER LEASE IS FOR
OF OTHER PARTIES TO LEASE OR CONTRACT NONRESIDENTIAL REAL PROPERTY. STATE CONTRACT
NUMBER OF ANY GOVERNMENT CONTRACT
--------------------------------------------------------- -------------------------------------------------------
<S> <C>
--------------------------------------------------------- -------------------------------------------------------
COMPANY DIRECTORS DIRECTOR STOCK OPTION PLAN
--------------------------------------------------------- -------------------------------------------------------
COMPANY EMPLOYEES 1995 STOCK INCENTIVE PLAN
--------------------------------------------------------- -------------------------------------------------------
CHARLES SIEGEL EMPLOYMENT AGREEMENT
1610 CORNERWAY BLVD.
SAN ANTONIO, TX 78219
--------------------------------------------------------- -------------------------------------------------------
ROSS E. BACON EMPLOYMENT AGREEMENT
1610 CORNERWAY BLVD.
SAN ANTONIO, TX 78219
--------------------------------------------------------- -------------------------------------------------------
MARK BLANKENSHIP EMPLOYMENT AGREEMENT
1610 CORNERWAY BLVD.
SAN ANTONIO, TX 78219
--------------------------------------------------------- -------------------------------------------------------
TERRY LALOSH EMPLOYMENT AGREEMENT
1610 CORNERWAY BLVD.
SAN ANTONIO, TX 78219
--------------------------------------------------------- -------------------------------------------------------
PAUL BARATZ EMPLOYMENT AGREEMENT
1610 CORNERWAY BLVD.
SAN ANTONIO, TX 78219
--------------------------------------------------------- -------------------------------------------------------
GENERAL ATLANTIC CORPORATION AGREEMENT REGARDING TAX CONSEQUENCES OF
WASHINGTON MALL II, CHURCH ST. DECONSOLIDATION AND TAX ALLOCATION AGREEMENT
P. O. BOX HM 2265
HAMILTON HMJX BERMUDA
--------------------------------------------------------- -------------------------------------------------------
OFFICERS AND DIRECTORS OF SOLO SERVE CORPORATION INDEMNITY AGREEMENT
1610 CORNERWAY BLVD.
SAN ANTONIO, TX 78219
--------------------------------------------------------- -------------------------------------------------------
</TABLE>
<PAGE> 12
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------- -------------------------------------------------------
DESCRIPTION OF CONTRACT OR LEASE AND NATURE OF
NAME AND MAILING ADDRESS, INCLUDING ZIP CODE, DEBTOR'S INTEREST. STATE WHETHER LEASE IS FOR
OF OTHER PARTIES TO LEASE OR CONTRACT NONRESIDENTIAL REAL PROPERTY. STATE CONTRACT
NUMBER OF ANY GOVERNMENT CONTRACT
--------------------------------------------------------- -------------------------------------------------------
<S> <C>
COMPANY EMPLOYEES RETIREMENT SAVINGS PLAN AND TRUST
--------------------------------------------------------- -------------------------------------------------------
</TABLE>
<PAGE> 13
<TABLE>
<S> <C>
IN RE SOLO SERVE CORPORATION CASE NO. 99-50272-K
---------------------- ------------------------
<S> <C>
(Debtor) (If known)
</TABLE>
SCHEDULE H - CODEBTORS
Provide the information requested concerning any person or entity,
other than a spouse in a joint case, that is also liable on any debts
listed by debtor in the schedules of creditors. Include all guarantors and
co-signers. In community property states, a married debtor not filing a
joint case should report the name and address of the nondebtor spouse on
this schedule. Include all names used by the nondebtor spouse during the
six years immediately preceding the commencement of this case.
[ ] Check this box if debtor has no codebtors.
<TABLE>
<CAPTION>
--------------------------------------------------------- -------------------------------------------------------
NAME AND ADDRESS OF CODEBTOR NAME AND ADDRESS OF CREDITOR
--------------------------------------------------------- -------------------------------------------------------
<S> <C>
--------------------------------------------------------- -------------------------------------------------------
ROSS BACON GENERAL ATLANTIC CORPORATION
1610 CORNERWAY BLVD WASHINGTON MALL II, CHURCH ST
SAN ANTONIO, TX 78219 P. O. BOX HM 2265
HAMILTON HMJX BERMUDA
--------------------------------------------------------- -------------------------------------------------------
TERRY LALOSH GENERAL ATLANTIC CORPORATION
1610 CORNERWAY BLVD WASHINGTON MALL II, CHURCH ST
SAN ANTONIO, TX 78219 P. O. BOX HM 2265
HAMILTON HMJX BERMUDA
--------------------------------------------------------- -------------------------------------------------------
MARK BLANKENSHIP GENERAL ATLANTIC CORPORATION
1610 CORNERWAY BLVD WASHINGTON MALL II, CHURCH ST
SAN ANTONIO, TX 78219 P. O. BOX HM 2265
HAMILTON HMJX BERMUDA
--------------------------------------------------------- -------------------------------------------------------
GENERAL ATLANTIC CORPORATION SANWA BUSINESS CREDIT CORP.
WASHINGTON MALL II, CHURCH ST ONE SOUTH WACKER
P. O. BOX HM 2265 CHICAGO, IL 60606
HAMILTON HMJX BERMUDA
--------------------------------------------------------- -------------------------------------------------------
--------------------------------------------------------- -------------------------------------------------------
--------------------------------------------------------- -------------------------------------------------------
--------------------------------------------------------- -------------------------------------------------------
--------------------------------------------------------- -------------------------------------------------------
</TABLE>
<PAGE> 14
DECLARATION CONCERNING DEBTOR'S SCHEDULES
DECLARATION UNDER PENALTY OF PERJURY BY INDIVIDUAL DEBTOR
I declare under penalty of perjury that I have read the foregoing summary
and schedules, consisting of ____________________ sheets, and that they are
(Total shown on summary page plus 1)
true and correct to the best of my knowledge, information and belief.
<TABLE>
<S> <C>
Date Signature:
---------------------- --------------------------------
(DEBTOR)
Date Signature:
---------------------- --------------------------------
(JOINT DEBTOR, IF ANY)
</TABLE>
[IF JOINT CASE, BOTH SPOUSES MUST SIGN.]
- -------------------------------------------------------------------------------
DECLARATION UNDER PENALTY OF PERJURY ON BEHALF OF CORPORATION OR PARTNERSHIP
I, the Chief Financial Officer of Solo Serve Corporation, named as Debtor
in this case, declare under penalty of perjury that I have read the foregoing
summary and schedules, consisting of 387 sheets (plus pages of attachments), and
that they are true and correct to the best of my knowledge, information and
belief.
Date 2/24/99 Signature: /s/ Ross E. Bacon
---------------------------------
ROSS E BACON
---------------------------------
(PRINT OR TYPE NAME OF
INDIVIDUAL SIGNING ON
BEHALF OF DEBTOR)
[AN INDIVIDUAL SIGNING ON BEHALF OF A PARTNERSHIP OR CORPORATION MUST
INDICATE POSITION OR RELATIONSHIP TO DEBTOR.]
- -------------------------------------------------------------------------------
PENALTY FOR MAKING A FALSE STATEMENT OR CONCEALING PROPERTY: FINE OF UP TO
$500,000 OR IMPRISONMENT FOR UP TO 5 YEARS OR BOTH. 18 U.S.C. SECTIONS 152 AND
3571.
