Page 83 - Bankruptcy Volume 1

Unless a different date is otherwise agreed upon in advance with the U.S. Trustee, or jurisdictional rules
provide for a different date, a debtor’s MOR for the current month is typically due on the 20th day of the
month following the current month. Local rules and practices pertain to the presentation format and ser-
vice of the MOR and, as such, the applicable local rules should be consulted in addition to the U.S.
Trustee.

The requirement to file the MOR is part of the "Operating Guidelines and Reporting Requirements" for
debtors in possession as published by the office of the U.S. Trustee for each jurisdiction. Failure to
properly file a MOR can serve as a basis for dismissal of debtor’s case or conversion to a Chapter 7 liq-
uidation. The obligation to prepare and file a MOR ceases upon the confirmation of a plan.

The reporting requirements for each U.S. Trustee region are generally of a "one size fits all" nature. Ac-
cordingly, there may be reporting requirements that would not appear to relate to a specific debtor either
because of size or nature of operations or the capabilities of the debtor to meet the requirement. Review-
ing the local requirements and determining whether there are areas of reporting that may be modified af-
ter discussion with the U.S. Trustee is often a necessary step in establishing the debtor’s post-filing re-
porting process.

Although consolidated reporting principles are applicable in financial reporting in Chapter 11 requiring
the consolidation of both debtor and nondebtor entities if the consolidation criteria are met, the MORs
are generally concerned with the assets and operations of debtors on a separate company basis. In most
cases, the assets and liabilities of each debtor should be separately reported on a stand-alone basis with
ownership or investments in related companies, both debtors and nondebtors, reflected as investments
and with the results of operation reflected as equity interests. By agreement with the U.S. Trustee, debt-
ors may combine related debtors in a single operating report in administratively consolidated Chapter 11
cases, provided that monthly cash disbursements are separately tracked and reported for each of the in-
dividual debtors combined in the single report.

References to aid in the preparation of the MOR can be found on the U.S. Trustee’s website at
www.justice.gov/ust/. Generally, the U.S. Trustee requires the following forms:

 Schedule of receipts and disbursements

 Statement of operations

 Balance sheet — differentiating between pre- and postpetition liabilities

 Bank account reconciliations

 Status of postpetition taxes and accounts payable aging

 Accounts receivable reconciliation and aging

 Tax reconciliation and aging

 Payments to insiders and professionals

 Postpetition status of secured notes, leases payable, and adequate protection payments

 Status of insurance coverage

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