FIRSTPLUS Financial Group, Inc.
The Company’s executive offices are shared with the facilities leased by Capital Lending Strategies, LLC, which incurs the cost and full responsibility of the lease. There is no formal agreement between the Company and Capital Lending Strategies, LLC with respect to the lease arrangement. Daniel T. Phillips, FPFG’s Director, is a Manager and Member of Capital Lending Strategies, LLC.
FPFG has a liability insurance policy with American Financial Services covering its directors and officers. The total premium for the policy is $77,500. Dexter & Company was the broker for the policy. John R. Fitzgerald, FPFG’s Director, is Executive Vice President of Dexter & Company.
In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3". This statement provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. This statement also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. SFAS 154 is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The Company does not anticipate any material impact on its financial statements from the adoption of SFAS 154 since it currently does not anticipate any voluntary changes to its accounting policies.
On August 3, 2006, the remaining Certificated Interest holder with conversion rights converted the balance of its conversion rights into 2,905,000 shares of the Company.
In July 2006, the Company instructed the Grantor Trust to make a distribution to holders of the Company’s common stock on a pro rata basis as of the record date to be set by the board of directors of the Company in an aggregate amount equal to fifty percent (50%) of the funds received, after reserves and expenses incurred on behalf of the trust, by the Grantor Trust from the registry of the court in the Grantor Trust Lawsuit in accordance with the Company’s Settlement Agreement with Danford L. Martin, individually, on behalf of the FPFX Shareholder Value Committee and the FPFX Steering Committee and as attorney-in-fact for all of the Petitioners in the Election Suit (as defined therein).
Item 2. | Management’s Discussion and Analysis or Plan of Operation |
General
FIRSTPLUS Financial Group, Inc. (the “Company”) was a diversified consumer finance company that originated, serviced, and sold consumer finance receivables. The Company operated through various subsidiaries until 1998 when macroeconomic factors adversely affected financial markets and largely destroyed the industry’s access to the capital markets. Without access to working capital, the Company’s ability to provide consumer-based products evaporated and, like virtually all its competitors, it saw its business liquidated to satisfy obligations. The Company’s principal operating subsidiary, FIRSTPLUS Financial, Inc. (“FPFI”), engaged in the business of originating, purchasing, marketing and servicing home equity loans. Prior to the collapse of the financial markets, its primary loan product was a credit consolidation or home improvement loan, which was generally secured by a second lien on real property (commonly referred to as a “high loan to value” or “HLTV” loan). Over the course of many years, FPFI originated billions of dollars of loans. By 1998, FPFI had attained a market leadership position in the HLTV loan business.
In March 1999, two wholly-owned subsidiaries then owned by the Company, FPFI, and FIRSTPLUS Special Funding Corp., filed for reorganization under Chapter 11 of the United States Bankruptcy Code. FIRSTPLUS Special Funding Corp. was a special purpose entity formed to facilitate certain borrowings by FPFI. The filings were made in the United States Bankruptcy Court for the Northern District of Texas in Dallas. Neither the Company, nor any of its other subsidiaries, sought bankruptcy protection.
FPFI’s plan of reorganization was confirmed on April 7, 2000 by the United States Bankruptcy Court, Northern District of Texas, Dallas Division. The plan of reorganization provided for the creation of the FPFI Creditor Trust (the “Creditor Trust”) to facilitate implementation of the plan of reorganization, to hold trust assets for the benefit of the beneficiaries, to resolve claims, to make distributions in accordance with the plan of reorganization and to provide various administrative services related to the Creditor Trust and the implementation of the plan of reorganization. Under the plan of reorganization, the Company still owned FPFI but could not transfer its interest in FPFI until the Creditor Trust terminates. However, the Creditor Trust trustee is the sole officer and director of FPFI. The stock was transferred to a voting trust whereby the voting trust would have the sole power to hold and vote the stock. As a result, the Company has no interest in FPFI or the Creditor Trust’s assets other than its interest in the FPFI Intercompany Claim.
In the plan of reorganization, the Company was able to resolve many of its own creditor claims through the plan of reorganization. In addition, the Company received the FPFG Intercompany Claim as a general unsecured claim defined in the plan of reorganization to be in an amount that was not to be less than $50 million. By being a holder of the FPFG Intercompany Claim, the Company became a beneficiary of the Creditor Trust. Under the plan of reorganization, the Company would only receive distributions as a beneficiary of the Creditor Trust from payments on the FPFG Intercompany Claim based on a previous series of securitized loan pools that had been sold in the marketplace. At that time, the amount and timing of cash flow from residuals were completely unknown. The Company has no operations with respect to, or any control over, the securitized loans.
To settle other claims asserted against it, the Company assigned portions of the FPFG Intercompany Claim to various creditors. Consistent with the plan of reorganization, in settlement of the claims of the holders of the Company’s 7.25% Convertible Subordinated Notes due 2003, the bondholders received an instrument representing the right to receive an assignment of 25% of the FPFG Intercompany Claim, permitting the bondholders to become a direct beneficiary of the Creditor Trust, and an agreement to instruct the Creditor Trust to make two payments to the bondholders of $1,428,000 based on certain conditions. The bondholder settlement was consummated in June 2001. Two of the bondholders also received agreements allowing them to convert portions of their new interest into an aggregate of 5,555,000 shares of the Company’s common stock. As of August 2006, these conversion rights have been exercised in full. The Company believes that it is entitled to a reassignment of a portion of the new interests from the bondholders who received the conversion rights and has initiated discussions with those holders and the trustee for the new interests regarding the reassignment.
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At the closing of the plan of reorganization, in settlement of claims of Paine Webber Real Estate Securities Inc. (“Paine Webber”), the Company assigned a 22% interest in the FPFG Intercompany Claim to Paine Webber allowing Paine Webber to become a direct beneficiary of the Creditor Trust. The Paine Webber claim has been settled, and the Company recovered the assignment from Paine Webber in August 2005.
The Company has agreed to pay 1.86% of the distributions it receives, up to an aggregate amount of $931,000, on the FPFG Intercompany Claim to Thaxton Investment Corporation (“Thaxton”). The amounts payable to Thaxton are based on a settlement of disputes concerning the purchase price paid by Thaxton to FirstPlus Consumer Finance, Inc. (“Consumer Finance”), then a subsidiary of the Company, pursuant to the sale of all of the assets of Consumer Finance to Thaxton in 1999.
The Company has previously discussed with other creditors settlement of various claims by assignment of portions of the FPFG Intercompany Claim. For example, the Company agreed to execute and deliver to its former landlord a certificate in the amount of $3,800,000 to evidence an undivided interest in FPFG Intercompany Claim, and in satisfaction of that agreement assigned a 7.6% interest in the FPFG Intercompany Claim to the landlord, in connection with amendments to the Company’s then existing lease for its executive and administrative offices. However, communications with this landlord and other parties have been dormant in recent years. There is no assurance that these parties may not assert claims in excess of the Company’s current estimate of the value of these claims or that there are no additional parties who may assert claims with respect to the FPFG Intercompany Claim. Since the bankruptcy proceedings, the FPFG Intercompany Claim had been the only substantial asset of the Company and the only source of potential payment for its obligations. The Company has booked a valuation reserve of approximately $986,000 against the amount set aside for potential creditors claims.
There can be no assurance as to the ultimate value of the FPFG Intercompany Claim or the timing of distributions on the FPFG Intercompany Claim.
Although the Company was not subject to any bankruptcy proceedings, it had no income producing activities and was dependent on its subsidiaries to fund its obligations. FPFI was severely limited in its ability to provide funds to the Company as a result of the bankruptcy filing. The Company’s other significant operating subsidiary at the time, Western Interstate Bancorp (“WIB”), was limited in its ability to release funds to the Company due to its debt covenant restrictions. Additionally, WIB’s main operating company, an FDIC-insured industrial loan company, FIRSTPLUS Bank, was also limited in the amount of funds that it could release by way of dividends or intercompany loans due to regulatory restrictions. These limitations caused the Company and its other subsidiaries to experience liquidity issues similar to FPFI.
The liquidity issues leading to the FPFI’s bankruptcy filing and the subsequent lack of operations and sources of income of the Company required significant focus by senior management of the Company. Additionally, senior management concentrated on related strategic issues such as negotiating with lenders and creditors, finding new sources of financing, and reorganizing and recapitalizing the Company. The resources available to the Company had been limited by the liquidity issues and the downsizing of the Company and its operations.
In May 2006, over the objections of George Davis, the court in the lawsuit styled FirstPlus Financial Group, Inc., Michael Montgomery, Jack Draper and The FirstPlus Financial Group Grantor Residual Trust v. George T. Davis and The FPFI Creditor Trust; Civil Action No. 05-02962; in the 298th District Court of Dallas County, Texas (the “Grantor Trust Lawsuit”), authorized the release of $10 million of funds previously interplead with the court to The FirstPlus Financial Group Grantor Residual Trust (the “Grantor Trust”). The Grantor Trust received the funds on May 30, 2006, and approximately $1.2 million of the interplead funds remains with the registry of the court. The Company does not believe it will have to raise additional funds in the next twelve months.
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In July 2006, the Company instructed the Grantor Trust to make a distribution to holders of the Company’s common stock on a pro rata basis as of the record date set by the board of directors of the Company in an aggregate amount equal to fifty percent (50%) of the funds received by the Grantor Trust from the registry of the court in the Grantor Trust Lawsuit in accordance with the Company’s Settlement Agreement with Danford L. Martin, individually, on behalf of the FPFX Shareholder Value Committee and the FPFX Steering Committee and as attorney-in-fact for all of the Petitioners in the Election Suit (as defined therein) (the “Settlement Agreement”). The Grantor Trust notified the Company that the distribution will be in an amount of approximately $.075 per share, assuming 48,245,090 shares of the Company’s common stock issued and outstanding as of the record date, based on the amount of the funds received by the Grantor Trust from the registry of the court in the lawsuit reduced by amounts reserved by the Grantor Trust on account of previous assignments by the Company prior to the creation of the Grantor Trust and various Grantor Trust expenses or reserves for Grantor Trust expenses. The Grantor Trust also distributed to the Company approximately $3.6 million, also based on the amount of the funds received by the Grantor Trust from the registry of the court in the lawsuit reduced by amounts reserved by the Grantor Trust on account of previous assignments by the Company prior to the creation of the Grantor Trust and various Grantor Trust expenses or reserves for Grantor Trust expenses. In the Settlement Agreement, the Company agreed to pay to the petitioners an aggregate amount of up to $300,000 for the expenses they incurred arising from the Election Suit, and the petitioners agreed to present invoices for such costs, fees and expenses to the Company. The petitioners have not yet presented invoices satisfactory to the Company for the entire $300,000.
The Company’s management has withstood the pressure from creditors and avoided bankruptcy primarily by assigning portions of the FPFG Intercompany Claim to various creditors. However, the Company has maintained that one of its strategies has been to create value in the Company so that its prospects are enhanced for the future. The Company has been active in seeking a platform for operations and has pursued several opportunities; however, prior opportunities were abandoned when the transactions did not meet the expectations of the Company after further examination and the Company learned of opposition to those transactions by certain shareholders.
Strategic Plan
On February 28, 2006, the Company entered into a factoring agreement with Signs For Life LLC (“Signs”) which provides for the Company to purchase accounts arising out sales of merchandise or services rendered by Signs that the Company approves for purchase. The Company will receive a factoring commission of 2% and discount over the purchase price of the accounts of 3.5% per annum over the prime rate quoted in the Wall Street Journal, plus additional fees based on the difference between the amounts outstanding under the accounts and the amounts in a reserve account established under the agreement.
Versatile Financial Technology LLC (“Versatile”) has also agreed to grant to the Company an option to acquire its 51% interest in Signs and a right of first refusal to acquire its interest in Signs. The Company and Versatile have not finalized the terms of the option or right of first refusal.
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Although the Company is not pursuing any other specific opportunities at this time, it is reviewing the marketplace and its strategic plan. The areas for opportunity may include buying an existing company, merging with an existing concern or entering into a joint venture. In 2004, the Company received a substantial return on its investment in Capital Lending, a startup company which provides financial and risk services offering insured loan programs to financial institutions. In recent years, the financial services industry has seen substantial growth and the Company believes that this trend will continue. The Company offers strong leadership with the vision and passion needed to catapult the Company into any sector of the industry.
The Company has not identified a target business |
Except with respect to the Signs transaction, to date, the Company has not selected any target business on which to concentrate its search for a business combination. Thus, there is no basis to evaluate the possible merits or risks of any target business or potential transaction into which the Company may enter. To the extent the Company enters into a transaction with a financially uncertain company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, the Company may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. Although the Company’s management will endeavor to evaluate the risks inherent in a particular target business, the Company cannot provide assurance that it will properly ascertain or assess all significant risk factors.
Sources of potential opportunities |
The Company anticipates that business opportunities will be brought to its attention from various sources, including its network relationships, who may present solicited or unsolicited proposals. The Company’s officers and directors as well as their affiliates may also bring transaction candidates to the Company’s attention. The Company may use the services of professional firms that specialize in business acquisitions, such as Versatile, in which event the Company may pay a finder’s fee or other compensation. In no event, however, will the Company pay any of its existing officers, directors or shareholders or any entity with which they are affiliated any finder’s fee or other compensation for services rendered to it prior to or in connection with the consummation of a transaction.
Selection of a potential business opportunity and structuring of a transaction |
In evaluating a prospective business opportunity or transaction, the Company will consider, among other factors, the following:
• | financial condition and results of operation; |
• | experience and skill of management and availability of additional personnel; |
• | stage of development of the products, processes or services; |
• | degree of current or potential market acceptance of the products, processes or services; |
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• | proprietary features and degree of intellectual property or other protection of the products, processes or services; |
• | regulatory environment of the industry; and |
• | costs associated with effecting the business combination. |
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business opportunity or transaction will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by the Company’s management in pursuing the business opportunity or transaction consistent with the Company’s overall strategy. In evaluating a prospective business opportunity or transaction, the Company will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which will be made available to the Company.
The fair market value of such business will be determined by the Company’s Board of Directors based upon standards generally accepted by the financial community, such as actual and potential sales, earnings and cash flow and book value. If the Board of Directors is not able to independently determine that the target business has a sufficient fair market value, the Company will obtain an opinion or valuation from an unaffiliated, independent investment banking or business valuation firm with respect to the satisfaction of such criteria. In addition, pursuant to the Settlement Agreement, for a year following the initial distribution from the Grantor Trust, the Company agreed not to issue any shares of its common stock pursuant to a transaction that would result in the issuance of shares of common stock in an amount equal to 30% of the then outstanding shares, unless the Company obtains a fairness opinion with respect to such transaction.
The time and costs required to select and evaluate a business opportunity and to structure and complete a transaction cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective business opportunity or transaction may reduce the amount of capital available to otherwise complete a business combination.
Possible lack of business diversification |
While the Company may seek to pursue multiple business opportunities with more than one target business, it is possible that at any particular time, the Company will be engaged in a single business opportunity or transaction. Accordingly, the prospects for the Company’s success may be entirely dependent upon the future performance of a single business or investment. Unlike other entities that may have the resources to complete several transactions in multiple industries or multiple areas of a single industry, it is probable that the Company will not have the resources to diversify its operations or benefit from the possible spreading of risks or offsetting of losses. The Company’s lack of diversification may:
• | subject the Company to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which it may operate subsequent to a transaction, and |
• | result in the Company’s dependency upon the development or market acceptance of a single or limited number of products, processes or services. |
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Limited ability to evaluate the target business’ management |
Although the Company intends to closely scrutinize a prospective business opportunity or transaction, the Company cannot provide assurance that its assessment of the prospective business opportunity or transaction will prove to be correct. Furthermore, the future role of the Company’s officers and directors, if any, in a prospective business opportunity or transaction cannot presently be stated with any certainty. While it is possible that one or more of the Company’s current officers and directors will remain associated in some capacity with the Company following a prospective business opportunity or transaction, it is unlikely that any of them will devote their full efforts to the Company’s affairs subsequent to prospective business opportunity or transaction. Moreover, the Company cannot provide assurance that its officers and directors will have significant experience or knowledge relating to the operations of the particular prospective business opportunity or transaction.
Following a transaction, the Company may seek to recruit additional executive officers or employees to supplement its current management. The Company cannot provide assurance that it will have the ability to recruit additional executive officers or employees, or that additional executive officers or employees will have the requisite skills, knowledge or experience necessary to enhance the Company’s current management.
Competition
In identifying, evaluating and selecting a business opportunity, the Company expects to encounter intense competition from other entities having similar business objectives. Many of these entities are well established and have extensive experience identifying and effecting business opportunities directly or through affiliates. Many of these competitors possess greater technical, human and other resources than the Company and its financial resources will be relatively limited when contrasted with those of many of these competitors. While the Company believes there are numerous potential business opportunities or transactions that may be available to it, the Company’s ability to compete in pursuing these opportunities or transactions will be limited by its available financial resources. This inherent competitive limitation gives others an advantage in pursuing these business opportunities or transactions.
Any of these obligations may place the Company at a competitive disadvantage in successfully pursuing a business opportunity or transaction. The Company believes, however, that its network relationships and the experience of its management team and Board of Directors may give it a competitive advantage over other competitors for pursuing business opportunities or transactions.
Financial Reporting Issues
In January 1999, the Company announced that it would be implementing new accounting guidance regarding the valuation of its retained interests from securitization transactions which had been recently provided by the Financial Accounting Standards Board (“FASB”). FASB issued a draft Special Report (“A Guide to Implementation of Statement 125 on Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, Questions and Answers, Second Edition”) which was finalized during December 1998. In this Special Report, FASB concluded that the “cash-out” method of valuing retained interests should be used to estimate fair value. The SEC Staff announced in December 1998 that the change to the “cash-out” method should be made by restatement. Based on this guidance, the Company decided to revise its methodology for estimating the fair value of certain financial instruments for each of the fiscal years in the three-year period ended September 30, 1997, the three-month transition period ended December 31, 1997, and the first three quarters of the fiscal year ended December 31, 1998. As the Company disclosed in its Form 10-Q for the quarter ended September 1998, it was expected that the impact would be material to the results of all prior periods.
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As a result of limited resources and conflicting demands, the Company has not completed its analysis necessary to complete the restatement. In addition, the Company has not had the financial resources or personnel to prepare and file its periodic reports with the SEC. In July 2005, the Company received a letter from the SEC directing the Company to file all required reports or become subject to a revocation of registration under the Securities Exchange Act of 1934. In preparation for the shareholders’ meeting originally scheduled for September 2005, but held in May 2006, the Company obtained audited financial statements for fiscal year 2004 to prepare and distribute its proxy materials for the meeting and resumed filing its periodic reports with the SEC. However, this information alone will not cure the Company’s reporting delinquencies with the SEC. Following the receipt of the letter, the Company had initial discussions with the SEC regarding its compliance issues and has started the process to prepare its plan to correct any SEC reporting delinquencies as it is able.
Following the settlement of the Company’s securities-related class action lawsuit in 2003, the Company began to analyze the extent of its liabilities and reporting compliance issues. In 2004, the Company received a small return on its investment in Capital Lending which allowed it to pay mounting debts and begin becoming compliant with its charter requirements in the State of Nevada. This also allowed the Company to organize its financial records in preparation for an audit of its financial statements for the year ended December 31, 2004, which is an expensive and time consuming process. Through changes in management and the nature of FPFI’s bankruptcy and litigation filed against the Company, the historical business records have been scattered. As a result, gathering the necessary information to complete the delinquent reports has taken more time than anticipated or would be required under other circumstances. The Company cannot currently estimate when it will complete the restatement or the delinquent reports for past time periods or if it will have access to the personnel and materials necessary to complete the restatement or the filing of the delinquent reports.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the “safe harbor” provisions under Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. The Company uses forward-looking statements in its description of its plans and objectives for future operations and assumptions underlying these plans and objectives, as well as in its expectations, assumptions, estimates and projections about the Company’s business and industry. These forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors as more fully described in this report.
Forward-looking terminology includes the words “may”, “expects”, “believes”, “anticipates”, “intends”, “projects” or similar terms, variations of such terms or the negative of such terms. These forward-looking statements are based upon the Company’s current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this report to reflect any change in its expectations or any changes in events, conditions or circumstances on which any forward-looking statement is based.
Item 3. | Controls and Procedures |
The Company’s management, with the participation of its Principal Executive Officer/Principal Accounting Officer, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Principal Executive Officer/Principal Accounting Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.
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Because the Company had been in a dormant capacity for the past several years, the Company has only one officer and employee. However, management’s revised assessment has concluded that, as of June 30, 2006, the Company’s shortage of personnel is not sufficient to constitute effective disclosure controls and procedures in light of the state of its financial records discussed in the paragraphs below and the resources required for the functions described under Part I, Item 2, Plan of Operation, particularly if unforeseen circumstances arise, such as those described in Part II, Item 1, Legal Proceedings.
There were no changes in the Company’s internal controls over financial reporting during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Item 1. | Legal Proceedings. |
Special Meeting Litigation |
In April 2006, the Company and the petitioners in the lawsuit styled Danford L. Martin, et al. v. FirstPlus Financial Group, Inc., et al., in the Second Judicial District Court for the State of Nevada (the “Election Suit”) entered into the Settlement Agreement to resolve the disputes in the Election Suit. Pursuant to the Settlement Agreement:
• | the Company agreed to pay to the petitioners an aggregate amount of up to $300,000 for the expenses they incurred arising from the Election Suit; |
• | upon the Company’s payment of the petitioners’ expenses, the parties would cause all claims and counterclaims in the Election Suit to be dismissed with prejudice and would exchange mutual releases; |
• | the petitioners agreed not to nominate an opposing slate of directors for election at the Company’s 2006 Special Meeting of Shareholders (the “Special Meeting”) or to take any action to delay, interfere with or contest the Special Meeting; |
• | the Company has agreed to instruct the Grantor Trust to make distributions to the holders of the Company’s common stock on a pro rata basis as of a record date to be set by the board of directors of the Company in aggregate amounts equal to fifty percent of the funds received by the Grantor Trust from the registry of the district court and from the Creditor Trust. The Company will announce record dates for these distributions at the applicable times; |
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• | prior to the initial distribution from the Grantor Trust, the Company has agreed not to issue any shares of its common stock, except pursuant to agreements in effect on the date of the Settlement Agreement; and |
• | for a year following the initial distribution from the Grantor Trust, the Company agreed not to issue any shares of its common stock pursuant to a transaction that would result in the issuance of shares of common stock in an amount equal to 30% of the then outstanding shares, unless the Company obtains a fairness opinion with respect to such transaction. |
The court dismissed the Election Suit on April 7, 2006. |
In May 2006, over the objections of George Davis, the court in the Grantor Trust Lawsuit authorized the release of $10 million in interplead funds to the Grantor Trust. The Grantor Trust received the funds on May 30, 2006.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None
Item 3. | Defaults Upon Senior Securities |
None
Item 4. | Submission of Matters to a Vote of Security Holders |
None
On July 15, 2006, the Company made the final payment on its Consultant’s Engagement Contract and Letter of Understanding with Versatile Consulting. The contract terms provided that Versatile Consulting LLC would provide services in identifying and acquiring an operating entity in the financial services sector and required payments of $10,000 per month with a $25,000 initial startup fee. The parties then mutually agreed to terminate the contract prior to its term. The Company did not incur any material early termination penalties in connection with the termination of the agreement.
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10.1 | First Amended FirstPlus Financial Group, Inc. Grantor Residual Trust Agreement, dated July 6, 2006 by FirstPlus Financial Group, Inc. as the sole settlor and the sole beneficiary |
31.1 | Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Principal Accounting Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Principal Executive Officer of Periodic Report Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
32.2 | Certification of Principal Accounting Officer of Periodic Report Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Issuer caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRSTPLUS Financial Group, Inc.
Dated: August 14, 2006 | /s/ Jack (J.D.) Draper | |
| President and Chief Executive Officer | |
| (Principal Executive and Accounting Officer) |
| | | |
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EXHIBIT INDEX
10.1 | First Amended FirstPlus Financial Group, Inc. Grantor Residual Trust Agreement, dated July 6, 2006 by FirstPlus Financial Group, Inc. as the sole settlor and the sole beneficiary |
31.1 | Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Principal Accounting Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Principal Executive Officer of Periodic Report Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
32.2 | Certification of Principal Accounting Officer of Periodic Report Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
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