In the United States Bankruptcy Court for the District of Delaware
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Case 1:05-cv-00444-JJF Document 3-12 Filed 06/28/2005 Page 1 of 337 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ----------------------------------------------------------- x In re: : Chapter 11 : NORTHWESTERN CORPORATION, : : Case No. 03-12872 (CGC) Debtor. : : ----------------------------------------------------------- x NorthWestern Corporation’s Amended Schedules A, B2, B23, B26, B27, B33, D, E, F, and G Case 1:05-cv-00444-JJF Document 3-12 Filed 06/28/2005 Page 2 of 337 NOTES TO AMENDED SCHEDULES OF ASSETS AND LIABILITIES AND STATEMENT OF FINCIANCIAL AFFAIRS NorthWestern Corporation, (the “Debtor”), submits these Amended Schedules of Assets and Liabilities (the “Schedules”) and Amended Statement of Financial Affairs (the “Statements”) pursuant to 11 U.S.C. § 521 and Federal Rule of Bankruptcy Procedure 1007. The Schedules and Statements have been prepared by the Debtor’s management and are unaudited. While management has made every reasonable effort to ensure that the Schedules and Statements are accurate and complete based on information that was available at the time of preparation, the subsequent receipt of information may result in material changes in data contained in the Schedules and Statements which would warrant amendment of same. The Debtor has made every reasonable effort to allocate liabilities between the pre- petition and post-petition periods based on the information and research that was conducted in connection with the preparation of the Schedules. As additional information becomes available and further research is conducted, the Debtor may modify the allocation of liabilities between pre-petition and post-petition. While reasonable efforts have been made to file complete and accurate Schedules and Statements, inadvertent errors or omissions may exist. Accordingly, the Debtor reserves the right to amend the Schedules and Statements as necessary or appropriate and expects that it will do so as information becomes available. Listing of a claim on Schedule D as a secured claim does not constitute an admission by the Debtor that such claim is secured. The Debtor reserves the right to dispute any claim listed on Schedule D as to amount, liability or its classification as a secured claim. Any failure to designate a claim listed on the Debtor’s Schedules as “disputed,” “contingent” or “unliquidated” does not constitute an admission by the Debtor that such amount is not “disputed,” “contingent” or “unliquidated”. The Debtor reserves the right to dispute, or to assert setoff rights, counterclaims or defenses to, any claim reflected on their Schedules as to amount, liability or classification, or to otherwise subsequently designate any claim as “disputed,” “contingent” or “unliquidated.” The claims of individual creditors for, among other things, merchandise, goods, services, or taxes are listed as either the lower of the amounts invoiced by such creditor or the amounts entered on the Debtor’s books and records and may not reflect credits or allowances due from such creditors to the Debtor. The Debtor reserves all rights with respect to any such credits and allowances including without limitation the right to assert claims objections and/or setoffs with respect to same. The dollar amounts of claims listed may be exclusive of contingent and unliquidated amounts. Case 1:05-cv-00444-JJF Document 3-12 Filed 06/28/2005 Page 3 of 337 UNITED STATES BANKRUPTCY COURT District of Delaware In Re: NorthWestern Corporation Case No. 03-12872(CGC) 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, C, D, E, F, G, H, 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 of Schedules D, E, and F to determine the total amount of the debtor's liabilities. Name of Schedule Attached No. of Amounts Scheduled (YES/NO) Sheets Assets Liabilities Other A - Real Property YES 2 $95,132,193.00 B - Personal Property YES 15 $1,615,595,765.11 C - Property Claimed as Exempt YES 1 D - Creditors Holding Secured Claims YES 1 $950,887,376.00 E - Creditors Holding Unsecured Priority Claims YES 12 $41,410,005.00 F - Creditors Holding Unsecured NonPriority Claims YES 38 $1,405,747,858.39 G - Executory Contracts and Unexpired Leases YES 260 H - Codebtors YES 1 I - Current Income of Individual Debtor(s) NO N/A J - Current Expenditures of Individual Debtor(s) NO N/A Total Number of Sheets in ALL Schedules 330 Total Assets $1,710,727,958 Total Liabilities $2,398,045,239 0312872031201102819023395 Case 1:05-cv-00444-JJF Document 3-12 Filed 06/28/2005 Page 4 of 337 Notes to Schedule A – Real Property All values reflected in Schedule A are Net Book Value. The following note applies to Schedule A: NorthWestern Corporation follows various state regulatory requirements in computing depreciation on its fixed assets. In accounting for fixed assets, regulatory authorities want to assure that ratepayers are not overcharged for the costs of utility assets while at the same time assuring that utilities are made whole on their invested capital. This includes recovery of the assets through depreciation as well as return on rate base. To provide this assurance, depreciation studies are conducted on a periodic basis and rates are established based upon the depreciation determined in the studies. The studies are based upon average lives for the various classes of assets. The studies rely on the assumption that if one asset’s life is shorter than average and another’s is longer than average that by applying an average rate, the depreciation claimed will be correct. Any loss on one asset offsets the gain on another. This logic serves as the basis for regulatory accounting. As stated above, the gains and losses on individual assets offset in the depreciation calculation. This is a difficult issue when tracking individual assets. The rate process uses summary data and is based upon a grouping of assets. As such, when looking at individual assets, it may appear that an individual asset is either over or under depreciated, but in total the asset class is correct. When individual assets are retired, any positive or negative depreciation balance is transferred into an accumulated balance that is referred to as an X-asset. Over time, with the changes resulting from the periodic depreciation studies, the X-asset balance will revert to zero. At any point in time it might be positive or negative. The X-asset balance represents over or under depreciation that will be trued-up in future rates. By carrying this balance of over or under depreciation in the depreciation reserve, it is included in rate base and return on invested capital is also adjusted. This accounting methodology is in compliance with GAAP. Case 1:05-cv-00444-JJF Document 3-12 Filed 06/28/2005 Page 5 of 337 FORM B6A (10/89) In Re: NorthWestern Corporation Case No. 03-12872(CGC) 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 a joint petition is filed, state whether husband, wife, both of them jointly, or the marital community may be liable on each claim by placing an “H,” “W,” “J,” or “C” in the column labeled “HWJC.” 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 any 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. CURRENT MARKET VALUE OF DEBTOR'S INTEREST IN H PROPERTY WITHOUT AMOUNT OF SECURED DESCRIPTION AND LOCATION OF PROPERTY NATURE OF DEBTOR'S INTEREST IN W DEDUCTING ANY SECURED CLAIM OR MORTGAGE PROPERTY J CLAIM OR MORTGAGE C Amended Attachment A (1) $95,132,193.00 Summary of Real Property Attachment A (2) is unchanged $0.00(1) Montana and Wyoming Summary and Detail Value: $64,326,573 Attachment A (3) is unchanged $0.00(2) South Dakota/North Dakota/Iowa/Nebraska Detail Value: $30,805,620 Subtotal (Total on this page) $95,132,193.00 Total (Report total also on Summary of Schedules) $95,132,193.00 Footnote: (1) Value included in amount set forth in Attachment A (1); original Attachment A (2) is unchanged and incorporated herein by reference. (2) Value included in amount set forth in Attachment A (1); original Attachment A (3) is unchanged and incorporated herein by reference. Page 1 of 1 Case 1:05-cv-00444-JJF Document 3-12 Filed 06/28/2005 Page 6 of 337 Description and Location of Property Book Value of Interest in Property1 Secured Claim or Mortgage Land (Montana) $8,798,369 Montana First Mortgage Bonds2 Leasehold Improvements (Montana) 39,701 Montana First Mortgage Bonds2 Structures/Improvements (Montana) 55,301,316 Montana First Mortgage Bonds2 64,139,387 Structures/Improvements (Wyoming) 187,186 Montana First Mortgage Bonds2 187,186 Land (South Dakota) 1,676,839 South Dakota Mortgage Bonds3 Leasehold Improvements (South Dakota) 1,599,050 None Structures/Improvements (South Dakota) 21,295,733 South Dakota Mortgage Bonds3 24,571,622 Land (North Dakota) 205,332 South Dakota Mortgage Bonds3 Structures/Improvements (North Dakota) 3,996,690 South Dakota Mortgage Bonds3 4,202,022 Land (Nebraska) 172,924 South Dakota Mortgage Bonds3 Structures/Improvements (Nebraska) 481,611 South Dakota Mortgage Bonds3 654,534 Structures/Improvements (Iowa) 1,377,442 South Dakota Mortgage Bonds3 1,377,442 $95,132,193 1 In 2002, the Debtor acquired its Montana operations from the Montana Power Company.