8-K 1 matlack2nd8k10-02.txt CURRENT REPORT UNITED STATES 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): October 2, 2002 --------------------- MATLACK SYSTEMS, INC. (Debtor-In-Possession as of March 29, 2001) (Exact name of registrant as specified in its charter) Delaware 1-10105 51-0310173 -------------------------------------------------------------------------------- (State or Other Jurisdiction of (Commission (I.R.S. Employer Incorporation or Organization) File Number) Identification Number) One Rollins Plaza, Wilmington, Delaware 19803 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (302) 426-3400 ----------------- N/A -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. Matlack Systems, Inc., a Delaware corporation (the "Company"), and all of its direct and indirect wholly owned subsidiaries (with the Company, the "Matlack Entities") are the subjects of a voluntary petition seeking protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), which are consolidated for the purpose of joint administration as Case No. 01-1114 (MFW) (the "Bankruptcy Proceedings"). On October 2, 2002, the Company, acting on behalf of all of the Matlack Entities, filed with the Bankruptcy Court an application to convert the Bankruptcy Proceedings into a voluntary liquidation under Chapter 7 of the United States Bankruptcy Code. The Matlack Entities believe that they are entitled as a matter of right to effect the conversion. The Company expects that, after the conversion, the United States Trustee will appoint a trustee for the remaining assets of the Matlack Entities. The Company expects the Bankruptcy Court to approve the application for conversion at a hearing to be held on October 17, 2002. Following the filing of the application for conversion of the Bankruptcy Proceedings into a voluntary liquidation, the Matlack Entities terminated all of their remaining employees but Stephen E. Judge, the Company's Chief Reorganization Officer. 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 hereunto duly authorized. MATLACK SYSTEMS, INC. Dated: October 9, 2002 By: /s/ Stephen E. Judge ---------------------------------- Stephen E. Judge Chief Reorganization Officer

Document Explanation REQUIRED DOCUMENTS Form No. Attached Attached Schedule of Cash Receipts and Disbursements MOR-1 Yes Bank Reconciliation (or copies of debtor's bank reconciliations) MOR-1 (CON'T) Yes Note 1 Copies of bank statements No Cash disbursements journals No Statement of Operations MOR-2 Yes Balance Sheet MOR-3 Yes Status of Postpetition Taxes MOR-4 Yes Copies of IRS Form 6123 or payment receipt No N/A Copies of tax returns filed during reporting period No Note 2 Summary of Unpaid Postpetition Debts MOR-4 Yes Listing of aged accounts payable N/A Note 3 Accounts Receivable Reconciliation and Aging MOR-5 Yes Debtor Questionnaire MOR-5 Yes

BANK ACCOUNTS For the Current Period From August 1, 2002 to Cumulative Since Filing August 31, 2002 OPERATING PAYROLL & TAX Actual Projected Actual Projected --------- ------------- ------ --------- ------ --------- (Note 1) Cash Receipts Collection of Accounts Receivable $ 4,000 $ 4,000 $ -- $ 55,775,202 $ 56,532,000 Other 8,009 8,009 -- 7,536,376 4,635,916 -------------- --------------- -------------- --------------- ------------- ------------ Total Cash Receipts 12,009 12,009 0 63,311,578 61,167,916 -------------- --------------- -------------- --------------- ------------- ------------ Cash Disbursements Total Payroll - 21,427 21,427 27,500 22,360,605 22,622,083 Leased Operators - - 4,861,230 4,890,000 Operating Expenses Fuel - - - 4,238,356 5,037,000 Occupancy costs 6,029 6,029 10,000 2,182,061 2,800,600 Equipment Costs - - 5,000 2,160,958 2,781,800 Insurance 4,095 4,095 12,500 6,128,500 7,086,300 Other Operating Expenses 22,694 22,694 20,000 8,599,927 10,905,998 -------------- --------------- -------------- --------------- ------------- ------------ Total Operating Expenses 32,818 32,818 47,500 23,309,802 28,611,698 Deposits with Key Vendors - - - 41,148 150,000 CAPEX - Equipment Refurbishment - - - 13,050 399,200 Deferred Rental and Leasing - - -- 97,789 1,448,000 Costs Restructuring Costs 10,617 - 10,617 15,000 7,109,754 9,732,097 Remittance of Equipment Sales 6,382,766 - Proceeds to Secured Lender - -- Inter - Account Transfer 21,427 (21,427) - -------------- --------------- -------------- --------------- ------------- ------------ Total Disbursements 64,862 - 64,862 90,000 64,176,144 67,853,078 -------------- --------------- -------------- --------------- ------------- ------------ Net Cash Flow/Requirements (52,853) - (52,853) (90,000) (864,566) (6,685,162) Opening Cash 103,969 103,969 (5,278,162) 915,682 1,317,000 -------------- --------------- -------------- --------------- ------------- ------------ Closing Cash $ 51,116 $ 51,116 $ (5,368,162) $ 51,116 $ (5,368,162) ============== =============== ============== =============== ============= ============= THE FOLLOWING SECTION MUST BE COMPLETED DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH ACTUAL COLUMN) Q1 2001 Q2 2001 Q3 2001 Q4 2001 ------- ------- ------- ------- TOTAL DISBURSEMENTS $ 150,000 $ 31,512,851 $ 22,023,905 $ 6,840,682 LESS: TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS 0 0 0 PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. from escrow accounts) 0 0 0 --------- ------------ ------------ TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES $ 150,000 $ 31,512,851 $ 22,023,905 $ 6,840,682 ========= ============ ============ ============ Q1 2002 Q2 2002 Q3 2002 ------- ------- ------- TOTAL DISBURSEMENTS $ 3,430,322 $ 166,133 $ 52,251 LESS: TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS 0 0 0 PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. from escrow accounts) 0 0 ----------- ------------ ------------ TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES $ 3,430,322 $ 166,133 $ 52,251 =========== ============ ============

Expressed in USD Converted @ 1:1.1.51 ------------------------------------------------------------------------------------------------------- 1 3 4 Dec 6 9 12 Operating Operating Operating Tax Matlack (Mellon (Mellon Operating Operating Bank of Nova Prefunding Inc. Lockbox) DE) (First Union) Mellon Scotia Mellon Working #145-2480 #8016-376-9#2000032632253 #0090907 #00820-15 #021-8181 Funds Note 1 Note 3 Note 4 Note 5 Note 6 Note 9 Note 10 Grand Total ------------------------------------------------------------------------------------------------------- BALANCE PER BOOKS $ 57,276 $ 8,453 $ 0 ($ 29,954) $ 0 $ 0 $ 300 $ 36,075 --------------------------------------------------------------------------------------------------------------------------- BANK BALANCE $ 57,276 $ 8,453 $ 0 $ 0 $ 0 $ 0 $0 $ 65,729 (+) DEPOSITS IN $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 TRANSIT (-) OUTSTANDING ($ 14,613) $ 0 $ 0 $ 0 $ 0 $ 0 ($ 14,613) CHECKS OTHER $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ------------------------------------------------------------------------------------------------------- ADJUSTED BANK $ 42,663 $ 8,453 $ 0 $ 0 $ 0 $ 0 $ 0 $ 51,116 BALANCE* ------------------------------------------------------------------------------------------------------- * Adjusted bank (NOTE 11) balance must equal balance per books (see Note 11) DEPOSITS IN None None None None None None None TRANSIT CHECKS OUTSTANDING Yes None None None None None None OTHER

Current Cumulative Month Filing to Date ----- -------------- REVENUES Revenue (Net) $ 4,000 $ 40,057,221 -------------------------- ------------------------ OPERATING EXPENSES Owned Compensation 0 9,795,960 Leased Operator Compensation (1,224) 5,016,042 Fuel Expense 0 3,002,342 Misc. Direct Costs 0 5,478,725 Cleaning Expenses 11,055 6,204,426 Mechanics Compensation 0 1,266,834 Misc. Maintenance Expense 3,562 2,193,247 Equipment Costs 265 7,809,043 Terminal Expenses 15,169 9,407,062 -------------------------- ------------------------ TOTAL OPERATING EXPENSES 28,827 50,173,681 -------------------------- ------------------------ GROSS PROFIT / (LOSS) (24,827) (10,116,460) -------------------------- ------------------------ G&A EXPENSES 201,016 14,574,140 -------------------------- ------------------------ OPERATING PROFIT / (LOSS) (225,843) (24,690,600) OTHER INCOME / EXPENSE Gain/Loss on Sale of Equipment (5,055) 13,729,505 Other Income/Deductions 0 928,580 -------------------------- ------------------------ TOTAL OTHER INCOME/EXPENSES (5,055) 14,658,085 -------------------------- ------------------------ PROFIT / (LOSS) ($ 220,788) ($ 39,348,685) -------------------------- ------------------------

Cumulative BREAKDOWN OF "OTHER" CATEGORY Month Filing to Date ----------------------------- ----- -------------- Revenue Owned Linehaul Revenue 0 20,035,706 Owned Accessorial Revenue 0 4,477,068 Leased Linehaul Revenue 0 6,865,934 Leased Accessorial Revenue 0 774,372 Cleaning Revenue 0 4,970,227 Other Operating Revenue 4,000 1,623,730 X-Rail Revenue 0 986,185 Maintenance Revenue 0 323,999 ------------------------ ---------------------- 4,000 40,057,221 ------------------------ ---------------------- Owned Compensation Driver Pay Hourly 0 3,091,600 Driver Overtime Pay 0 34,120 Contractual Pay Mile 0 3,554,726 Fringe Benefits 0 3,115,514 ------------------------ ---------------------- 0 9,795,960 ------------------------ ---------------------- Leased Operator Comp Leased Operator Comp 0 4,948,634 Purchased Transportation (1,224) 67,408 ------------------------ ---------------------- (1,224) 5,016,042 ------------------------ ---------------------- Fuel Expense Fuel Terminal 0 1,150,105 Fuel Outside 0 1,820,865 Fuel Taxes 0 3,904 Oil and Oil Tax 0 27,468 ------------------------ ---------------------- 0 3,002,342 ------------------------ ---------------------- Misc Direct Costs Utility Pay Hourly 0 203,219 Utility Fringe Benefits 0 7,902 Tire 0 2,202,439 Hose 0 151,023 Meals 0 218,725 Lay Over 0 611,616 Tolls 0 165,110 Fines 0 14,452 Mileage Taxes 0 87,334 Insurance 0 1,816,905 ------------------------ ---------------------- 0 5,478,725 ------------------------ ---------------------- Cleaning Expenses Cleaners Pay 0 1,040,407 Overtime Pay 0 42,431 Fringe Benefits 0 690,965 Cleaning Supplies 0 476,089 Waste Treatment 0 1,039,350 Outside Contractors 0 727,755 Net Cleaning Interbranch 0 (1,285) Environmental 11,055 2,188,714 ------------------------ ---------------------- 11,055 6,204,426 ------------------------ ---------------------- Mechanics Compensation Mechanics Pay 0 772,715 Overtime Pay 0 53,916 Fringe Benefits 0 440,203 Net Mechanics Interbranch 0 0 ------------------------ ---------------------- 0 1,266,834 ------------------------ ----------------------

Cumulative BREAKDOWN OF "OTHER" CATEGORY Month Filing to Date ----------------------------- ----- -------------- Misc Maintenance Expense Parts Expense 0 1,213,644 Outside Repairs 0 752,782 Tire Repair 0 89,458 Shop Expense 3,562 137,363 ------------------------ ---------------------- 3,562 2,193,247 ------------------------ ---------------------- Equipment Costs Tractor Depreciation 0 59,706 Tractor Rent 0 2,541,450 Trailer Depreciation 0 1,044,877 Trailer Rent 0 102,087 License 265 952,700 Permit 0 96,312 Interest 0 3,011,911 ------------------------ ---------------------- 265 7,809,043 ------------------------ ---------------------- Terminal Expenses Terminal Salary & Fringe 0 3,696,862 Utilities 2,622 984,872 Communication Equipment 0 102,886 Communication Usage 0 715,209 Facility Maintenance 0 290,991 Facility Occupancy 8,291 1,505,479 Transportation General 4,256 2,110,763 ------------------------ ---------------------- 15,169 9,407,062 ------------------------ ---------------------- G&A Expenses Salaries Expense 22,729 6,092,099 Fringe Benefits 0 (79,434) Communications Basic 132 75,286 Communication Services 0 7,732 Facilities - Rents 0 329,809 General Office Supplies 4 45,553 IBM Supplies 0 4,147 Conventions & Seminars 0 14,322 Postage 0 81,962 Travel & Other 1,187 193,060 Outside Services 16,147 5,191,260 Computer Software 0 36,225 General & Admin 1,391 207,017 Marketing Promotions 0 7,010 Legal 6,039 334,042 Insurance 0 288,363 Dues & Contributions 0 361 Depreciation 0 118,339 Depreciation - Leasehold 0 40,740 Computer Equipment Rent 2,387 366,156 Other Expense/Terminal Exp. 0 1,220,091 ------------------------ ---------------------- 201,016 14,574,140 ------------------------ ----------------------

BOOK VALUE AT END OF BOOK VALUE ON ASSETS CURRENT REPORTING MONTH PETITION DATE ------ ----------------------- ------------- CURRENT ASSETS Cash $ 36,075 $ 389,571 Restricted Cash 0 Accounts Receivable (Net) 4,000 18,045,306 Inventories 0 3,639,142 Prepaid Expenses 390,000 2,108,548 --------------------------------- ----------------------------- TOTAL CURRENT ASSETS 430,075 24,182,567 --------------------------------- ----------------------------- PROPERTY AND EQUIPMENT Revenue Equipment - Cost 0 98,199,269 Less: Accumulated Depreciation (Revenue) 0 (75,767,277) Other Property & Equipment - Cost 2,020,041 72,633,319 Less: Accumulated Depreciation (Other) (1,330,730) (41,326,073) --------------------------------- ----------------------------- TOTAL PROPERTY & EQUIPMENT 689,311 53,739,238 --------------------------------- ----------------------------- OTHER ASSETS Goodwill 0 744,016 Other Assets 0 937,839 --------------------------------- ----------------------------- TOTAL OTHER ASSETS 0 1,681,855 --------------------------------- ----------------------------- TOTAL ASSETS $ 1,119,386 $ 79,603,660 --------------------------------- ----------------------------- BOOK VALUE AT END OF BOOK VALUE ON LIABILITIES AND OWNER EQUITY CURRENT REPORTING MONTH PETITION DATE LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition) Accounts Payable 1,261,545 Accrued Wages & Benefits 332,154 Accrued Interest 3,011,910 Accrued Professional Fees (Note 1) 385,173 Accrued Taxes (refer to FORM MOR-4) 214,370 Accrued Insurance, Environmental & Other (935,727) Amounts Due to Insiders (Note 1) --------------------------------- ----------------------------- TOTAL POSTPETITION LIABILITIES 4,269,425 0 --------------------------------- ----------------------------- LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition) Secured Debt 48,234,256 48,234,256 Remittance of Sale Proceeds to Secured Lenders (37,374,952) Priority Debt 2,272,119 9,330,355 Unsecured Debt 32,153,819 33,125,644 --------------------------------- ----------------------------- TOTAL PRE-PETITION LIABILITIES 45,285,241 90,690,255 --------------------------------- ----------------------------- --------------------------------- ----------------------------- TOTAL LIABILITIES 49,554,666 90,690,255 --------------------------------- ----------------------------- OWNER EQUITY Capital Stock 8,814,434 8,814,434 Capital Surplus 10,619,341 10,619,341 Retained Earnings - Pre-Petition (28,520,370) (28,520,370) Retained Earnings - Post-Petition (39,348,685) Post-Petition Contributions (Distributions) (Draws) (attach schedule) -------------------------------- ------------------------------ NET OWNER EQUITY (48,435,280) (9,086,595) -------------------------------- ------------------------------ TOTAL LIABILITIES AND OWNERS' EQUITY $1,119,386 $81,603,660 -------------------------------- ------------------------------

Beginning Amount Ending Tax Withheld Amount Date Check No. Tax Liability or Accrued Paid Paid or EFT Liability --------- ---------- ---- ---- ------ --------- Federal Withholding 0 4,396 4,396 Various EFT 0 FICA - Employee 0 1,111 1,111 Various EFT 0 FICA - Employer 0 1,111 1,111 Various EFT 0 Unemployment 0 0 0 0 Other 0 0 0 0 ------------ ------------ ------------ ------------ ------------- ------------ Total Federal Taxes 0 6,618 6,618 0 ------------ ------------ ------------ ------------ ------------- ------------ State and Local Withholding 1,395 1,303 0 2,698 Sales 72,596 0 0 72,596 Income 0 0 0 0 Unemployment 0 0 0 0 Real & Personal Property 125,195 0 0 125,195 Other 390,771 0 0 390,771 ------------ ------------ ------------ ------------ ------------- ------------ Total State and Local 611,074 1,303 0 591,260 ------------ ------------ ------------ ------------ ------------- ------------ Total Taxes 611,821 7,921 6,618 591,260 ------------ ------------ ------------ ------------ ------------- ------------

Number of Days Past Due Current 0-30 31-60 61-90 Over 90 Total ------- ---- ----- ----- ------- ----- Accounts Payable 1,261,545 0 1,261,545 Accrued Wages & Benefits 332,154 332,154 Accrued Interest 3,011,910 3,011,910 Accrued Professional Fees 385,173 385,173 Accrued Taxes (refer to FORM MOR-4) 214,370 214,370 Accrued Insurance, Environmental & (935,727) (935,727) Other ------------ ------------ ------------ ------------ ------------- ------------ Total Post-Petition Debts 4,269,425 0 0 0 4,269,425 ------------ ------------ ------------ ------------ ------------- ------------

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING Accounts Receivable Reconciliation Amount ---------------------------------- ------ Total Accounts Receivable at the beginning of the reporting period $ 4,000 + Amounts billed during the period 4,000 - Amounts collected during the period (4,000) - Bad Debt and other write-offs 0 + Change in Reserve 0 - Other during the period 0 ---------- Total Accounts Receivable at the end of the reporting period $ 4,000 ========== Accounts Receivable Aging Amount ------------------------- ------ 0 - 30 days old 4,000 31 - 60 days old 0 61 - 90 days old 0 91 + days old 0 ---------- 4,000 Foreign exchange, Revenue Recognition, Sales Accrual Adjustments & Write-offs 0 Amount considered uncollectible (Bad Debt) 0 ---------- Accounts Receivable (Net) $ 4,000 ========== DEBTOR QUESTIONNAIRE Must be completed each month Yes No ---------------------------- --- -- 1. Have any assets been sold or transferred outside the normal course X of business this reporting period? If yes, provide an explanation below. 2 Have any funds been disbursed from any account other than a debtor X in possession account this reporting period? If yes, provide an explanation below. 3. Have all postpetition tax returns been timely filed? If no, X provide an explanation below. 4. Are workers compensation, general liability and other necessary X insurance coverages in effect? If no, provide an explanation below.

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