Yes, the balance sheet that O'Brien ended with is the balance sheet that Krivsky started with including assets and liabilities that come with that balance sheet. Player resource and contingent liabilities make the Reds look to have been bankrupt at the time of O'Briens closing statement of assets and liabilities.
I like REDREAD, but in this case I think that REDREAD is trying to cook the books while getting his debits and credits skewed.