HTML Document View

Full title: Chapter 11 Monthly Operating Report for the Month Ending: 07/31/2021 Filed by Klausner Lumber Two LLC. (Butz, Daniel) (Entered: 08/24/2021)

Document posted on Aug 23, 2021 in the bankruptcy, 10 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Address art 1: Cash Receipts and Disbursements Current Month Cumulative.Paid Current Month Cumulative Month Cumulative .i Asgaard Capital LLC Other $146,273 $6,949,521 $146,273 $6,949,521ii Morris Nichols Arsht & TunnelCo-Counsel $106,809 $1,308,213 $106,809 $1,308,213iii Westerman Ball Ederer Miller Co-Counsel $72,450 $1,775,198 $72,450 $1,775,198iv Dinsmore & Shohl LLP Special Counsel $59,808 $375,412 $59,808 $375,412vPaid Current Month Cumulative Month Cumulative .All professional fees and expenses (debtor & committees) $538,082 $17,290,299 $538,082 $17,290,299art 6: Postpetition Taxes Current Month Cumulative .

List of Tables

Document Contents

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE n Re.Klausner Lumber Two, LLC § Case No. 20-11518 § § Debtor(s) § Jointly Administered onthly Operating Report Chapter 11 eporting Period Ended: 07/31/2021 Petition Date: 06/10/2020 onths Pending:14 Industry Classification: 3 2 1 1 eporting Method: Accrual Basis Cash Basis ebtor's Full-Time Employees (current): 0 ebtor's Full-Time Employees (as of date of order for relief): 0upporting Documentation (check all that are attached): For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor)Statement of cash receipts and disbursements Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit Statement of operations (profit or loss statement) Accounts receivable aging Postpetition liabilities aging Statement of capital assets Schedule of payments to professionals Schedule of payments to insiders All bank statements and bank reconciliations for the reporting period Description of the assets sold or transferred and the terms of the sale or transfer/ Daniel B. Butz Daniel B. Butz ignature of Responsible Party Printed Name of Responsible Party8/20/2021 Morris, Nichols, Arsht & Tunnell LLP 1201 North Market St / PO Box 1347 ate Wilmington, DE 19899-1347 Address

1

art 1: Cash Receipts and Disbursements Current Month Cumulative. Cash balance beginning of month $57,670,668 . Total receipts (net of transfers between accounts) $7,821 $89,250,399. Total disbursements (net of transfers between accounts) $582,246 $32,371,893. Cash balance end of month (a+b-c) $57,096,243 . Disbursements made by third party for the benefit of the estate $0 $0. Total disbursements for quarterly fee calculation (c+e) $582,246 $32,371,893art 2: Asset and Liability Status Current Month Not generally applicable to Individual Debtors. See Instructions.). Accounts receivable (total net of allowance) $1,172,216 . Accounts receivable over 90 days outstanding (net of allowance) $1,172,216. Inventory (Book Market Other (attach explanation)) $0 Total current assets $58,651,395 . Total assets $70,791,450 . Postpetition payables (excluding taxes) $1,151,453 . Postpetition payables past due (excluding taxes) $0 . Postpetition taxes payable $0 Postpetition taxes past due $0 Total postpetition debt (f+h) $1,151,453 . Prepetition secured debt $0 Prepetition priority debt $154,402 . Prepetition unsecured debt $176,446,549 . Total liabilities (debt) (j+k+l+m) $177,752,404 . Ending equity/net worth (e-n) $-106,960,954 art 3: Assets Sold or Transferred Current Month Cumulative . Total cash sales price for assets sold/transferred outside the ordinarycourse of business $0 $83,400,000 . Total payments to third parties incident to assets being sold/transferredoutside the ordinary course of business $0 $21,725,578 . Net cash proceeds from assets sold/transferred outside the ordinarycourse of business (a-b) $0 $61,674,422 art 4: Income Statement (Statement of Operations) Current Month CumulativeNot generally applicable to Individual Debtors. See Instructions.). Gross income/sales (net of returns and allowances) $7,821 . Cost of goods sold (inclusive of depreciation, if applicable) $0. Gross profit (a-b) $7,821 . Selling expenses $0 . General and administrative expenses $89,667 . Other expenses $0 . Depreciation and/or amortization (not included in 4b) $0 . Interest $0 . Taxes (local, state, and federal) $0 . Reorganization items $379,435

2

art 5: Professional Fees and Expenses Approved Approved Paid Current Paid Current Month Cumulative Month Cumulative . Debtor's professional fees & expenses (bankruptcy) Aggregate Total $458,594 $16,554,552 $458,594 $16,554,552Itemized Breakdown by Firm Firm Name Role i Asgaard Capital LLC Other $146,273 $6,949,521 $146,273 $6,949,521ii Morris Nichols Arsht & TunnelCo-Counsel $106,809 $1,308,213 $106,809 $1,308,213iii Westerman Ball Ederer Miller Co-Counsel $72,450 $1,775,198 $72,450 $1,775,198iv Dinsmore & Shohl LLP Special Counsel $59,808 $375,412 $59,808 $375,412v Eisner Amper LLP Financial Professional $11,813 $141,417 $11,813 $141,417vi Elliott Greenleaf, PC Other $0 $344,429 $0 $344,429 vii Armstrong Teasdale Other $51,780 $374,585 $51,780 $374,585viii Law Office of Susan Kaufman Special Counsel $0 $4,715 $0 $4,715ix Cypress Holdings LLC Other $0 $5,042,747 $0 $5,042,747 x Donlin Recano & Co, Inc Other $9,661 $238,315 $9,661 $238,315Approved Approved Paid Current Paid Current Month Cumulative Month Cumulative . Debtor's professional fees & expenses (nonbankruptcy) Aggregate Total $79,488 $735,747 $79,488 $735,747Itemized Breakdown by Firm Firm Name Role i Ellis & Winters LLP Local Counsel $0 $205,920 $0 $205,920 ii McCauseland Keen Local Counsel $0 $29,928 $0 $29,928 iii Curtis, Mallet-Prevost, Colt & MOther $79,488 $499,899 $79,488 $499,899. All professional fees and expenses (debtor & committees) $538,082 $17,290,299 $538,082 $17,290,299art 6: Postpetition Taxes Current Month Cumulative . Postpetition income taxes accrued (local, state, and federal) $0 $0. Postpetition income taxes paid (local, state, and federal) $0 $0. Postpetition employer payroll taxes accrued $0 $0 . Postpetition employer payroll taxes paid $0 $0 . Postpetition property taxes paid $0 $1,249,942 . Postpetition other taxes accrued (local, state, and federal) $0 $0. Postpetition other taxes paid (local, state, and federal) $0 $0art 7: Questionnaire - During this reporting period: . Were any payments made on prepetition debt? (if yes, see Instructions) Yes No. Were any payments made outside the ordinary course of business Yes Nowithout court approval? (if yes, see Instructions) . Were any payments made to or on behalf of insiders? Yes No. Are you current on postpetition tax return filings? Yes No. Are you current on postpetition estimated tax payments? Yes No. Were all trust fund taxes remitted on a current basis? Yes No

3

. Was there any postpetition borrowing, other than trade credit? Yes No(if yes, see Instructions) . Were all payments made to or on behalf of professionals approved by Yes No N/Athe court? Do you have: Worker's compensation insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions)Casualty/property insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions)General liability insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions)Has a plan of reorganization been filed with the court? Yes No. Has a disclosure statement been filed with the court? Yes NoAre you current with quarterly U.S. Trustee fees as Yes No set forth under 28 U.S.C. § 1930? art 8: Individual Chapter 11 Debtors (Only) . Gross income (receipts) from salary and wages $0 . Gross income (receipts) from self-employment $0 . Gross income from all other sources $0 . Total income in the reporting period (a+b+c) $0 . Payroll deductions $0 . Self-employment related expenses $0 . Living expenses $0 . All other expenses $0 . Total expenses in the reporting period (e+f+g+h) $0 . Difference between total income and total expenses (d-i) $0. List the total amount of all postpetition debts that are past due $0. Are you required to pay any Domestic Support Obligations as defined by 11 Yes NoU.S.C § 101(14A)? . If yes, have you made all Domestic Support Obligation payments? Yes No N/A

4

Privacy Act Statement 8 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C. § 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor's progresshrough the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case iseing prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the informations needed to perform the trustee's or examiner's duties or to the appropriate federal, state, local, regulatory, tribal, or foreignaw enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may beade for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult thexecutive Office for United States Trustee's systems of records notice, UST-001, "Bankruptcy Case Files and Associatedecords." See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http://ww.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal oronversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F). declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting ocumentation are true and correct and that I have been authorized to sign this report on behalf of the state. s/ Bob Prusak Bob Prusak ignature of Responsible Party Printed Name of Responsible Partyhief Restructuring Officer 08/20/2021 itle Date

5

Statement of Cash Receipts and Disbursements Klausner Lumber Two LLC Case No. 20-11518 Month Ended 7/31/2021
Table 1 on page 6. Back to List of Tables
None Operating DIP
Segregated
Utilities Taxes DIP Escrow Current Month Cumulative
To-Date
Beginning Cash Balance $ 419,488 $ 335,469 $ - $ - $ 56,915,711 $ 57,670,668 $ 217,737
Receipts:
DIP funding 0 5,500,000
Assset Sales 0 274,531
Sale Transaction 0 70,783,021
Sale Transaction (non-cash) (a) 0 12,616,979
Bank transfer 1,000,000 1,000,000 60,142,737
TSA Income 3,266 3,266 33,622
Interest Income 2,399 2,399 18,110
Other receipts 2,156 2,156 24,136
Total Receipts 5,422 1,000,000 0 0 2,399 1,007,821 149,393,136
Disbursements:
Insurance 0 174,501
Director fees and expenses 25,000 25,000 427,813
Taxes 0 0
Bank transfer 1,000,000 1,000,000 60,142,737
Administrative expenses 341 4,802 5,143 623,410
Professional fees (b) 534,228 534,228 9,080,830
Filing fees 0 0
Transaction fees 0 9,134,548
Other Transaction costs (non-cash) (a) 0 12,616,979
US Trustee quarterly fees 17,875 17,875 313,812
Total Disbursements 341 581,905 0 0 1,000,000 1,582,246 92,514,630
Cash - End of Month $ 424,569 $ 753,564 $ - $ - $ 55,918,110 $ 57,096,243 $ 5 7,096,243
Total Disbursements $ 1,582,246 $ 9 2,514,630 Less: Transfers to DIP Accounts (1,000,000) (60,142,737) Plus: Disbursements made by escrow accounts Total Disbursements for calculating US Trustee Quarterly Fees $ 582,246 $ 3 2,371,893(a) Including costs paid by buyer at closing (b) Including amounts paid into the Professional Fee Escrow

6

Balance Sheet Klausner Lumber Two LLC Case No 20-11518 Month Ended 7/31/2021 As of June 10, 2020 As of July 31, 2021 (Petition Date) ASSETS Current Assets Checking/Savings EastWest Bank - DIP 424,568 EastWest Bank - DIP Segregated 753,565 EastWest Bank - DIP MM 55,918,110 EastWest Bank - Utilities 0 EastWest Bank - Taxes 0 EastWest Bank - Operating 0 217,382 Wells Fargo - operating 0 349 Wells Fargo - payroll 0 6 Total Checking/Savings 57,096,243 217,737 Other Current Assets Acc Receivable A/R - domestic 21 21 A/R - international 101,278 101,278 A/R - KTU 1,070,917 1,070,917 Total Acc Receivable 1,172,216 1,172,216 Due from KL-1 143,991 143,991 Inventory - green lumber 0 5,642 Inventory - log wood (manual) 0 231,547 Inventory - debarked 0 13,098 Inventory - mfg supplies 0 159,594 Inventory - Log wood in bark 0 23,034 NetSpend Debit Card 950 0 Prepaid Expenses - other 0 25,705 Professional Fee Escrow Account 227,995 0 Retainer 10,000 10,000 Total Other Current Assets 1,555,152 1,784,827 Total Current Assets 58,651,395 2,002,564 Other Assets Accumulated Depreciation - F/A Accum Depr - buildings 0 (260) AccumDepr - Tech Equip 0 (10,603) Total Accumulated Depreciation - F/A 0 (10,863) Buildings 0 61,064,116 Land and Improvements Land of own built-up land 0 1,729,276 Land improvements 0 8,807,037 Total Land and Improvements 0 10,536,313 Machinery & Equipment Factory and office equipment 0 4,708,600 Fixed assets under construction 0 3,483,592 Plant & Machinery 0 99,988,378 Total Machinery & Equipment 0 108,180,570 Other Assets Loan Klausner NMTC LLC 12,140,055 12,140,055 Security Deposits 0 1,200 Total Other Assets 12,140,055 12,141,255 Total Other Assets 12,140,055 191,911,391 TOTAL ASSETS 70,791,450 193,913,955

7

Balance Sheet Klausner Lumber Two LLC Case No 20-11518 Month Ended 7/31/2021 As of June 10, 2020 As of July 31, 2021 (Petition Date) LIABILITIES & EQUITY Liabilities Current Liabilities Other Current Liabilities Accounts Payable 0 0 Accrued expenses 1,151,453 0 Notes Payable - DIP 0 0 Total Other Current Liabilities 1,151,453 0 Total Current Liabilities 1,151,453 0 Long Term Liabilities Liabilities subj to compromise 176,600,951 181,190,951 Total Long Term Liabilities 176,600,951 181,190,951 Total Liabilities 177,752,404 181,190,951 Equity Retained Earnings 5,994,286 12,485,622 Net Income (112,955,240) 237,382 Total Equity (106,960,954) 12,723,004 TOTAL LIABILITIES & EQUITY 70,791,450 193,913,955

8

Statement of Operations Klausner Lumber Two, LLC Case No. 20-11518 Month Ended 7/31/2021 Cumulative REVENUES Month Filing to Date
Table 1 on page 9. Back to List of Tables
Misc Income $ 2,156 $ 24,136
TSA Income $ 3,266 $ 33,623
Sale of Assets 259,231
Sale Transaction 83,400,000
Interest Income 2,399 18,110
Net Revenue $ 7,821 $ 83,735,100
OPERATING EXPENSES
Bank Fees 231 1,569
Interest Expense 175,182
Director Fees 25,000 427,813
Dues & Subscriptions 0
Professional fees - ordinary course 52,364 854,652
Independent Contractors 10,872 168,302
Insurance Expense 174,502
Misc expense 1,200 39,735
Other expenses 0
Equipment rental 0
Utilities 0
Plant expenses 24,891
Other misc plant expenses 187,805
Asset writeoff 180,228,756
DIP fees and expenses 491,683
Total expenses 89,667 182,774,890
Net Profit (Loss) Before Reorganization Items $ (81,846) $ (99,039,790)
REORGANIZATION ITEMS None
CRO Fees & Expenses 126,508 3,197,120
Professional fees 248,322 6,176,956
Transaction fees 0 10,958,713
Filing fees 0
US Trustee Fees 4,605 318,413
Total Reorganization Items 379,435 20,651,202
Net Profit (Loss) $ (461,281) $ (119,690,992)

9

Bank Reconciliations Klausner Lumber Two LLC Case No. 20-11518 Month Ended 7/31/21 Bank Type Account A/C # Balance EastWest Bank Operating Account X6205 $ 424,568 EastWest Bank DIP Segregated Account X6667 753,565 EastWest Bank Utilities Account X6212 0 EastWest Bank Taxes Account X6219 0 EastWest Bank DIP Segregated Money Market X6933 55,918,110 Bank Balance $ 57,096,243 (1) Add/Less: Reconciling Items (outstanding checks) 0 Book Balance $ 57,096,243 (1) Bank statements and reconciliations for all open and active bank accounts are retainedby the Debtor and are available upon request by the United States Trustee's office. The following pre-petition bank accounts have been closed: Wells Fargo A/C ending 0594 Wells Fargo A/C ending 1075 Wells Fargo A/C ending 5967 Wells Fargo A/C ending 6777 The following post-petition bank account was closed in June, 2020 and replaced by EastWest A/C ending 6205EastWest Bank A/C ending 6177

10