IN THE UNITED STATES BANKRUPTCY COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`In re:
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`MODIVCARE INC., et al.,
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` Debtors.
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`Chapter 11
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`Case No. 25-90309 (ARP)
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`(Jointly Administered)
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`SCHEDULES OF ASSETS AND LIABILITIES FOR
`VALUED RELATIONSHIPS, INC. (CASE NO. 25-90376)
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`1 A complete list of each of the Debt ors in these chapter 11 cases (the “Chapter 11 Cases”) and the last four digits
`of each Debtor’s taxpayer identification number (if applicable) may be obtained on the website of the Debtors’
`proposed claims and noticing agent at https://www.veritaglobal.net/ModivCare. Debtor ModivCare Inc.’s
`principal place of business and the Debtors’ service address in these Chapter 11 Cases is 6900 E. Layton Avenue,
`Suite 1100 & 1200, Denver, Colorado 80237.
`Case 25-90309 Document 317 Filed in TXSB on 09/17/25 Page 1 of 92
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`US-DOCS\164113847.5
`IN THE UNITED STATES BANKRUPTCY COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`In re:
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`MODIVCARE INC., et al.,
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` Debtors.1
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`Chapter 11
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`Case No. 25-90309 (ARP)
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`(Jointly Administered)
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`GLOBAL NOTES, METHODOLOGY,
`AND SPECIFIC DISCLOSURES REGARDING
`THE DEBTORS’ SCHEDULES OF ASSETS AND
`LIABILITIES AND STATEMENTS OF FINANCIAL AFFAIRS
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`ModivCare Inc. and its debtor affiliates, as debtors and debtors-in-possession in the above-
`captioned Chapter 11 Cases (collectively, the “Debtors” or the “Company”), filed their respective
`Schedules of Assets and Liabilities (each, a “ Schedule” and, collectively, the “Schedules”) and
`Statements of Financial Affairs (each, a “Statement” and, collectively, the “Statements” and,
`together with the Schedules, the “Schedules and Statements”) with the United States Bankruptcy
`Court for the Southern District of Texas (the “Court”). The Debtors, with the assistance of their
`legal and financial advisors, prepared the unaudited Schedules and Statements in accordance with
`section 521 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”),
`rule 1007 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and rule 1007-
`1 of the Bankruptcy Local Rules for the Southern District of Texas.
`These global notes and statements of limitations, methodology, and disclaimers regarding
`the Debtors’ Schedules and Statements (the “Global Notes ”) pertain to, are incorporated by
`reference in, and comprise an integral part of, all of the Schedules and Statements, and should be
`referred to, and referenced in connection with, any review of the Schedules and Statements.
`The Debtors generally prepare their financials on a consolidated basis but the Schedules
`and Statements reflect the Debtors’ reasonable efforts to report certain financial information of
`each Debtor on a stand -alone, unconsolidated basis. These Schedules and Statements neither
`purport to represent financial statements prepared in a ccordance with Generally Accepted
`Accounting Principles in the United States (“GAAP”), nor are they intended to be fully reconciled
`with the financial statements of each Debtor. The Schedules and Statements are unaudited and
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`1 A complete list of each of the Debtors in these chapter 11 cases (the “Chapter 11 Cases”) and the last four digits
`of each Debtor’s taxpayer identification number (if applicable) may be obtained on the website of the Debtors’
`proposed claims and noticing agent at https://www.veritaglobal.net/ModivCare. Debtor ModivCare Inc.’s
`principal place of business and the Debtors’ service address in these Chapter 11 Cases is 6900 E. Layton Avenue,
`Suite 1100 & 1200, Denver, Colorado 80237.
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`contain information that is subject to further review and potential adjustment.
`In preparing the Schedules and Statements, the Debtors relied on financial data derived
`from their books and records that was available at the time of such preparation. Although the
`Debtors have made commercially reasonable efforts to ensure the accuracy and completeness of
`the Schedules and Statements, subsequent information or discovery may result in material changes
`to the Schedules and Statements. As a result, inadvertent errors or omissions may exist.
`Accordingly, the Debtors and their directors, ma nagers, officers, agents, attorneys and financial
`advisors do not guarantee or warrant the accuracy or completeness of the data that is provided
`herein, and shall not be liable for any loss or injury arising out of or caused in whole or in part by
`the acts, errors, or omissions, whether negligent or otherwise, in procuring, compiling, collecting,
`interpreting, reporting, communicating, or delivering the information contained herein or the
`Schedules and Statements. In no event shall the Debtors or their dir ectors, managers, officers,
`agents, attorneys and financial advisors be liable to any third party for any direct, indirect,
`incidental, consequential, or special damages (including, but not limited to, damages arising from
`the disallowance of a potential claim against the Debtors or damages to business reputation, lost
`business, or lost profits), whether foreseeable or not and however caused, even if the Debtors or
`their directors, managers, officers, agents, attorneys, and financial advisors are advised of the
`possibility of such damages.
`The Schedules and Statements have been signed by Chad J. S handler, the Chief
`Transformation Officer of the Debtors and an authorized signatory for each Debtor. In reviewing
`and signing the Schedules and Statements, Mr.  Shandler has relied upon the efforts, statements,
`advice, and representations of personnel of the Debtors and the Debtors’ advisors and other
`professionals. Given the scale of the Debtors’ businesses, Mr. Shandler has not (and practically
`could not have) personally verified the accuracy of each statement and representation in the
`Schedules and Statements including, but not limited to, statements and representations
`concerning amounts owed to creditors, classification of such amounts, and creditor addresses.
`Subsequent receipt of information or an audit may result in material changes in financial
`data requiring amendment of the Schedules and Statements. Accordingly, the Schedules and
`Statements remain subject to further review and verification by the Debtors. The Debtors reserve
`their right to amend the Schedules and Statements from time -to-time as may be necessary or
`appropriate; provided, that the Debtors, their agents, and their advisors expressly do not undertake
`any obligation to update, modify, revise, or recategorize the information provided herein or to
`notify any third party should the information be updated, modified, revised, or recategorized
`except as required by applicable law.
`Global Notes and Overview of Methodology
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`1. Description of the Cases. The Debtors commenced these voluntary cases under chapter 11
`of the Bankruptcy Code on August 20, 2025 (the “Petition Date”). The Debtors are authorized
`to operate their businesses and manage their properties as debtors in possession pursuant to
`sections 1107(a) and 1108 of the Bankruptcy Code. On August 21, 2025, the Court entered an
`order authorizing the joint administration of the cases pursuant to Bankruptcy Rule 1015(b)
`[Docket No. 21]. Notwithstanding the joint administration of the Debtors’ cases for procedural
`purposes, each Debtor has filed its own Schedules and Statements.
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`The factual background regarding the Debtors, including their business, their capital
`structure, and the events leading to the commencement of the Chapter 11 Cases is set forth in
`the Declaration of Chad J. Shandler in Support of Chapter 11 Petitions and First Day Relief
`[Docket No. 14].
`No trustee or examiner has been requested in these chapter 11 cases. On September 5, 2025,
`the Office of the United States Trustee for the Southern District of Texas appointed an official
`committee of unsecured creditors [Docket No. 124].
`2. Global Notes Controlling. In the event that the Schedules or Statements differ from any of
`the Global Notes, the Global Notes shall control.
`3. Reservation of Rights. Reasonable efforts have been made to prepare and file complete and
`accurate Schedules and Statements; however, as noted above, inadvertent errors or omissions
`may exist. The Debtors reserve all rights to amend and supplement the Schedules and
`Statements as may be necessary or appropriate but do not undertake any obligation to do so;
`provided, that the Debtors, their agents, and their advisors expressly do not undertake any
`obligation to update, modify, revise, or recategorize the information provided herein or to
`notify any third party should the information be updated, modified, revised, or recategorized,
`except as required by applicable law, from time to time. Nothing contained in the Schedules,
`Statements, or Global Notes shall constitute a waiver of rights with respect to these Chapter 11
`Cases including, but not limited to, any rights or claims of the Debtors against any third party
`or issues involving substantive consolidation, defenses, statutory or equitable subordination,
`and/or causes of action arising under the provisions of chapter 5 of the Bankruptcy Code and
`any other relevant non- bankruptcy laws to recover assets or avoid transfers. Any specific
`reservation of rights contained elsewhere in the Global Notes does not limit in any respect the
`general reservation of rights contained in this paragraph.
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`a. No Admission. Nothing contained in the Schedules and Statements is
`intended as, or should be construed as, an admission or stipulation of the
`validity of any claim against any Debtor, any assertion made therein or
`herein, or a waiver of any of the Debtors’ rights to d ispute any claim or
`assert any cause of action or defense against any party.
`b. Claims Description . Any failure to designate a claim listed on the
`Schedules and Statements as “disputed,” “contingent,” or “unliquidated”
`does not constitute an admission by the Debtors that such amount is not
`“disputed,” “contingent,” or “unliquidated.” Each Debtor reserves the
`right to dispute and to assert setoff rights, counterclaims, and defenses to
`any claim reflected on its Schedules or Statements on any grounds,
`including, but not limited to , amount, liability, priority, status, and
`classification, and to otherwise subsequently designate any claim as
`“disputed,” “contingent,” or “unliquidated.” The listing of a claim does
`not constitute an admission of liability by the Debtors, and the Debtors
`reserve the right to amend the Schedules and Statements accordingly.
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`c. Recharacterization. The Debtors have made reasonable efforts to
`correctly characterize, classify, categorize, and designate the claims,
`assets, executory contracts, unexpired leases, and other items reported in
`the Schedules and Statements. Nevertheless, due to the complexity of the
`Debtors’ businesses, the Debtors may not have accurately characterized,
`classified, categorized, or designated certain items and/or may have
`omitted certain items. Accordingly, the Debtors reserve all of their rights
`to recharacterize, reclassify, recategorize, or redesignate items reported in
`the Schedules and Statements at a later time as necessary or appropriate,
`including, without limitation, whether contracts or leases listed herein
`were deemed executory or unexpired as of the Petition Date and remain
`executory and unexpired postpetition.
`d. Classifications. The listing of (a) a claim (i) on Schedule D as “secured,”
`or (ii) on Schedule E/F as either “priority” or “unsecured,” or (b) a contract
`or lease on Schedule G as “executory” or “unexpired” does not constitute
`an admission by the Debtors of the legal rights of the claimant or contract
`counterparty, or a waiver of the Debtors’ rights to recharacterize or
`reclassify such claim or contract pursuant to a schedule amendment, claim
`objection or otherwise. Moreover, although the Debtors may hav e
`scheduled claims of various creditors as secured claims for informational
`purposes, no current valuation of the Debtors’ assets in which such
`creditors may have a security interest has been undertaken. Except as
`provided in an order of the Court, the Debtors reserve all rights to dispute
`and challenge the secured nature or amount of any such creditor’s claims
`or the characterization of the structure of any transaction, or any document
`or instrument related to such creditor’s claim , including whether a lien or
`security interest is properly perfected under applicable law or subject to
`any potential avoidance actions.
`e. Estimates and Assumptions . The preparation of the Schedules and
`Statements required the Debtors to make certain reasonable estimates and
`assumptions with respect to the reported amounts of assets and liabilities,
`the amount of contingent assets and contingent liabilities, and the reported
`amounts of revenues and expenses as of the Petition Date. Actual results
`could differ materially from such estimates. The Debtors reserve all rights
`to amend the reported amounts of assets and liabilities to reflect cha nges
`in those estimates or assumptions.
`f. Causes of Action. Despite reasonable efforts, the Debtors may not have
`identified and/or set forth all of their causes of action (filed or potential)
`against third parties as assets in their Schedules and Statements, including,
`without limitation, avoidance actions arising under chapter 5 of the
`Bankruptcy Code and actions under other relevant bankruptcy and
`non-bankruptcy laws to recover assets. The Debtors reserve all rights with
`respect to any causes of action (including avoidance actions), controversy,
`right of setoff, cross claim, counterclaim, or recoupment and any claim on
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`contracts or for breaches of duties imposed by law or in equity, demand,
`right, action, lien, indemnity, guaranty, suit, obligation, liability, damage,
`judgment, account, defense, power, privilege, license, and franchise of any
`kind or character whatsoever , known, unknown, fixed or contingent,
`matured or unmatured, suspected or unsuspected, liquidated or
`unliquidated, disputed or undisputed, secured or unsecured, assertable
`directly or derivatively, whether arising before, on, or after the Petition
`Date, in contract or in tort, in law or in equity, or pursuant to any other
`theory of law they may have (collectively, “Causes of Action ”), and
`neither the Global Notes nor the Schedules and Statements shall be deemed
`a waiver of any such claims, Causes of Action, or avoidance actions, or in
`any way prejudice or impair the assertion of such claims or Causes of
`Action.
`g. Property Rights. Exclusion of certain property rights, including without
`limitation intellectual, real, personal, or otherwise, from the Schedules and
`Statements should not be construed as an admission that such property
`rights have been abandoned, have been terminated or otherwise expired by
`their terms, or have been assigned or otherwise transferred pursuant to a
`sale, acquisition, or other transaction . Conversely, inclusion of certain
`property rights shall not be construed to be an admission that such property
`rights have not been abandoned, have not been terminated, or otherwise
`have not expired by their terms, or have not been assigned or otherwise
`transferred pursuant to a sale, acquisition, or other transaction. The
`Debtors have made every effort t o attribute property rights to the rightful
`Debtor owner, however, in some instances, property rights owned by one
`Debtor may, in fact, be owned by another. Accordingly, the Debtors
`reserve all of their rights with respect to the legal status of any and a ll
`property rights.
`h. Insiders. In the circumstances where the Schedules and Statements
`require information regarding “insiders,” the Debtors have included
`information with respect to the individuals and entities whom the Debtors
`believe may be included in the definition of “insider” set forth in section
`101(31) of the Bankruptcy Code during the relevant time periods. Such
`individuals may no longer serve in such capacities. The listing or omission
`of a party as an “insider” for the purposes of the Schedules and Statements
`is for informational purposes and is not intended to be nor should be
`construed as an admission that those parties are insiders for purposes of
`section 101(31) of the Bankruptcy Code. Information regarding the
`individuals or entities listed as insiders in th e Schedules and Statements
`may not be used for: (a) the purposes of determining (i) control of the
`Debtors; (ii) the extent to which any individual or entity exercised
`management responsibilities or functions; (iii) corporate decision-making
`authority over the Debtors; or (iv) whether such individual or entity (or the
`Debtors) could successfully argue that they are not an insider under
`applicable law, including the Bankruptcy Code and federal securities laws,
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`or with respect to any theories of liability or (b) any other purpose.
`Furthermore, certain of the individuals or entities identified as insiders
`may not have been insiders for the entirety of the twelve -month period
`before the Petition Date, but the Debtors have included them herein out of
`an abundance of caution. The Debtors reserve all rights with respect
`thereto.
`i. Use of Artificial Intelligence. In certain situations, the Debtors and/or the
`Debtors’ advisors may have used artificial intelligence (“AI”) and/or
`machine learning technology in preparation of the information included in
`the Statements and Schedules. AI has many benefits including the ability
`to review large amounts of data in a relatively short period of time, and
`generate complex output based upon such data. However, AI technology
`has inherent limitations and can produce inaccurate results. In all cases
`where AI was utilized, the Debtors and/or the Debtors ’ advisors made
`reasonable efforts to have a human review and edit the final content.
`However, inaccuracies may occur and consequently no assurances can be
`made regarding the information derived based upon AI technology that
`was included in the Statements and Schedules.
`4. Methodology
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`a. Basis of Presentation . For financial reporting purposes, the Debtors generally
`prepare consolidated financial statements, which include financial information for
`both the Debtors and certain non-Debtor subsidiaries and affiliates. Combining the
`assets and liabilities set forth in the Debtors’ Schedules and Statements would result
`in amounts that would be substantially different from financial information that
`would be prepared on a consolidated basis under GAAP, due to eliminations related
`to intercompany and other transactions recorded on the Debtors ’ financial
`statements. Therefore, these Schedules and Statements neither purport to represent
`financial statements prepared in accordance with GAAP nor are they intended to
`fully reconcile to the financial statements prepared by the Debtors. Unlike the
`consolidated financial statements, these Schedules and Statements, except where
`otherwise indicated, reflect the assets and liabilities of each separate Debtor.
`Information contained in the Schedules and Statements has been derived from the
`Debtors’ books and records and historical financial statements.
`The Debtors attempted to attribute the assets and liabilities , certain required
`financial information, and various cash disbursements to the proper Debtor entity.
`However, due to limitations within Debtors’ accounting systems, it is possible that
`not all assets or liabilities have been recorded with the correct legal entity on the
`Schedules and Statements. Accordingly, the Debtors reserve all rights to
`supplement and/or amend the Schedules and Statements in this regard.
`Given, among other things, the uncertainty surrounding the collection, ownership,
`and valuation of certain assets and the amount and nature of certain liabilities,
`including contingent liabilities, a Debtor may report more assets than liabilities.
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`Such report shall not constitute an admission that such Debtor was solvent on the
`Petition Date or at any time prior to or after the Petition Date. Likewise, a Debtor
`reporting more liabilities than assets shall not constitute an admission that such
`Debtor was insolvent on the Petition Date or at any time prior to or after the Petition
`Date. For the avoidance of doubt, nothing contained in the Schedules and
`Statements is indicative of the Debtors’ enterprise value. The Schedules and
`Statements contain un audited information that is subject to further review and
`potential adjustment.
`b. Reporting Date. Unless otherwise noted, the Schedules and Statements generally
`reflect the Debtors’ books and records as of the close of business on July 31, 2025,
`and as of the Petition Date for liabilities, adjusted for certain authorized payments
`under the First Day Orders (as defined herein).
`c. Confidentiality or Sensitive Information . There may be instances in which
`certain information in the Schedules and Statements intentionally has been
`redacted due to, among other things, the nature of an agreement between a Debtor
`and a third party, local restrictions on disclosure, concerns about the confidential
`or commercially sensitive nature of certain information (e.g., personally
`identifiable information of individuals ), or concerns for the privacy of the
`Debtors’ creditors, employees, and customers. The alterations will be limited to
`only what is necessary to protect the Debtor s or the applicable third party. The
`Debtors are also authorized or required to redact certain information from the
`public record pursuant to the Order (A) Authorizing the Debtors to (I) File a
`Consolidated Creditor Matrix and List of the 30 Largest Unsecured Creditors,
`and (II) to Redact Certain Personally Identifiable Information; (B) Waiving the
`Requirement to File a List of Equity Security Holders; (C) Authorizing Service of
`Parties in Interest by Electronic Mail; (D) Approving the Form and Manner of
`Notifying Creditors of the Commencement of the Chapter 11 Cases; And (E)
`Granting Related Relief [Docket No. 53], which authorizes the Debtors to redact,
`seal, or otherwise protect such information from public disclosure.
`d. Consolidated Entity Accounts Payable and Disbursement Systems . As
`described more fully in the Motion of Debtors for Entry of Interim and Final Orders
`(A) Authorizing Debtors to (I) Continue Existing Cash Management System,
`(II) Maintain Existing Business Forms, and (III) Continue Intercompany
`Transactions; and (B) Granting Related Relief [Docket No. 16] (the “Cash
`Management Motion ”), the Debtors utilize an integrated, centralized cash
`management system in the ordinary course of business to collect, concentrate, and
`disburse funds generated by their operations (the “Cash Management System ”).
`The Debtors maintain a consolidated accounts payable an d disbursements system
`to pay ope rating and administrative expenses through various disbursement
`accounts.
`The listing of any amounts with respect to such receivables and payables is not, and
`should not be construed as, an admission or conclusion of the Debtors regarding
`the allowance, classification, validity, or priority of such account or
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`characterization of such balances as debt, equity, or otherwise. For the avoidance
`of doubt, the Debtors reserve all rights, claims, and defenses in connection with any
`and all intercompany receivables and payables including, but not limited to, with
`respect to the characterization of intercompany claims, loans, and notes.
`Prior to the Petition Date, the Debtors and certain non -Debtor affiliates and
`subsidiaries engaged in intercompany transactions (the “Intercompany
`Transactions”) in the ordinary course of business, which resulted in intercompany
`receivables and payables. Pursuant to the Interim Order (A) Authorizing Debtors
`to (I) Continue Existing Cash Management System, (II) Maintain Existing Business
`Forms, and (III) Continue Intercompany Transactions; and (B) Granting Related
`Relief [Docket No. 59], the Court has authorized (on an interim basis) the Debtors
`to continue to engage in I ntercompany Transactions in the ordinary course of
`business subject to certain limitations set forth therein. Due to the large number of
`Debtors and the complex nature of their intercompany transactions, it would be
`unduly burdensome to provide a complete listing of all intercompany balances.
`Accordingly, intercompany balances have been excluded from Schedule A/B and
`Schedule E/F
`In addition, certain of the Debtors act on behalf of or make payments for other
`Debtors and certain non-Debtor affiliates and subsidiaries. Reasonable efforts have
`been made to indicate the ultimate beneficiary of a payment or obligation. Whether
`a particular payment or obligation was incurred by the entity actually making the
`payment or incurring the obligation is a complex question of applicable
`non-bankruptcy law, and nothing herein constitutes an admission that any Debtor
`entity is an obligor with respect to any such payment. The Debtors reserve all rights
`to reclassify any payment or obligation as attributable to another entity and all rights
`with respect to the proper accounting and treatment of such payments and liabilities.
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`e. Duplication. Certain of the Debtors’ assets, liabilities, and prepetition payments
`may properly be disclosed in response to multiple parts of the Statements and
`Schedules. To the extent these disclosures would be duplicative, the Debtors have
`endeavored to only list once such assets, liabilities, and prepetition payments.
`f. Net Book Value of Assets . In many instances, current market valuations are not
`maintained by or readily available to the Debtors. It would be prohibitively
`expensive, unduly burdensome, and an inefficient use of estate resources for the
`Debtors to obtain current market valuations for all assets. As such, unless otherwise
`indicated, net book values as of the Petition Date are presented for all assets. When
`necessary, the Debtors have indicated that the value of certain assets is “Unknown”
`or “Undetermine d.” Amounts ultimately realized may vary materially from net
`book value (or other value so ascribed). Accordingly, the Debtors reserve all rights
`to amend, supplement, and adjust the asset values set forth in the Schedules and
`Statements. Assets that have been fully depreciated or that were expensed for
`accounting purposes either do not appear in these Schedules and Statements or are
`listed with a zero-dollar value, as such assets have no net book value. The omission
`of an asset from the Schedules and Statements does not constitute a representation
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`regarding the ownership of such asset, and any such omission does not constitute a
`waiver of any rights of the Debtors with respect to such asset. Nothing in the
`Debtors’ Schedules and Statements shall be, or shall be deemed to be, an admission
`that any Debtor was solvent or insolvent as of the Petition Date or any time prior to
`the Petition Date.
`g. Currency. All amounts shown in the Schedules and Statements are in U.S. Dollars,
`unless otherwise indicated.
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`h. Payment of Prepetition Claims Pursuant to First Day Orders . Following the
`Petition Date, the Court entered various orders authorizing the Debtors to, among
`other things, (a) prevent interruptions to the Debtors’ businesses’; (b) ease the strain
`on the Debtors’ relationships with certain essential constituents, including
`employees, vendors, customers , insurance providers, sureties and issuers under
`commercial bonds and letters of credit and the beneficiaries thereof, cash
`management banks, taxing authorities, and utility providers; and (c) provide access
`to critical financing and capital, the “First Day Orders”). Accordingly, outstanding
`liabilities may have been reduced by any Court -approved postpetition payments
`made on prepetition payables. T o the extent these liabilities have been satisfied,
`they are not listed in the Schedules and Statements, unless otherwise indicated. The
`Debtors reserve the right to update the Schedules and Statements to reflect
`additional payments made pursuant to an order of the Court (including the First
`Day Orders).
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`i. Other Paid Claims . To the extent the Debtors have reached any postpetition
`settlement with a vendor or other creditor, the terms of such settlement will prevail,
`supersede amounts listed in the Schedules and Statements, and shall be enforceable
`agreement by all parties, subject to Court approval (to the extent necessary) . To
`the extent the Debtors pay any of the claims listed in the Schedules and Statements
`pursuant to any order of the Court, including the Interim Order (A) Authorizing
`Debtors to Pay Prepetition Trade Claims in the Ordinary Course of Business, and
`(B) Granting Related Relief [Docket No. 64] the Debtors reserve all rights to amend
`and supplement the Schedules and Statements and take other action, such as filing
`claims objections, as is necessary and appropriate to avoid overpayment or
`duplicate payment for such liabilities.
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`j. Setoffs. The Debtors routinely incur setoffs in the ordinary course of business that
`arise from various items including, but not limited to, intercompany transactions,
`counterparty settlements, pricing discrepancies, overpayments, returns, warranties,
`charge backs, credits, rebates, returns, refunds, negotiations, and/or disputes
`between the Debtors and their customers and/or suppliers. These normal, ordinary
`course setoffs and nettings are common in the Debtors’ line of business. Any setoff
`of a prepetition debt to be applied against the Debtors is subject to the automatic
`stay and must comply with section 553 of the Bankruptcy Code.
`k. Accounts Receivable. The accounts receivable information listed on the
`Schedules includes receivables from the Debtors’ customers and are calculated net
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`of any amounts that, as of the Petition Date, may be owed to such customers in
`the form of offsets or other price adjustments pursuant to the Debtors’ customer
`program policies and day- to-day operating policies and any applicable Court
`order. In addition, t he amounts shown reflect only invoiced (billed) accounts
`receivable and do not include unbilled receivables or other accrued revenue.
`l. Property and Equipment . Unless otherwise indicated, owned property and
`equipment are stated at net book value. The Debtors may lease furniture, fixtures,
`and equipment from certain third -party lessors, or may have secured financing
`arrangements with third parties for the payment of such equipment . To the extent
`possible, any such leases are set forth in the Schedules and Statements. Nothing in
`the Statements or Schedules is or shall be construed as an admission or
`determination as to the legal status of any lease (including whether any lease is a
`true lease or a financing arrangement), and the Debtors reserve all rights with
`respect to any of such issues including, but not limited to, the recharacterization
`thereof.
`m. Liens. The property and equipment listed in the Statements and Schedules are
`presented without consideration of any asserted mechanics’, materialmen, or other
`liens that may attach (or have attached) to such property and equipment. UCC liens
`as of the Petiti