Mail Stop 4561
December 2, 2005
Jack (J.D.) Draper
President
FIRSTPLUS Financial Group, Inc.
5100 North O`Connor Blvd., 6th Floor
Irving, TX 75039
Re: FIRSTPLUS Financial Group, Inc.
Form 10-KSB for Fiscal Year Ended December 31, 2004
Filed September 22, 2005
File No. 000-27750
Dear Mr. Draper:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as possible in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments. We
have limited our review of your filings to those issues we have
addressed in our comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
* * * * * * *
Form 10-KSB filed September 22, 2005
Legal Proceedings
Bankruptcy of FIRSTPLUS Financial, Inc., page 4
1. In order to help us more fully understand the portion of the
FPFG
Intercompany Claim to which you are entitled, please provide us
with
a rollforward of the claim balance from inception through December
31, 2004. Your rollforward should reflect portions of the Claim
assigned to creditors and other parties as well as a narrative
explaining the reasons why amounts were assigned to these other
parties.
2. In light of the various litigation matters surrounding the
Bankruptcy of FirstPlus Financial, Inc., the Class Action
Securities
Litigation, and the Grantor Trust Litigation, please tell us how
you
determined the $4,980,223 value assigned to the FPFG Intercompany
claim was collectible as of December 31, 2004. Your response
should
also address how you determined that the $2.9 million valuation
reserve for the FPFG Intercompany Claim was sufficient as of
December
31, 2004. In your response, please address how your accounting
was
consistent with paragraph 8 of SFAS No. 5.
Management`s Plan of Operation
Financial Reporting Issues, page 11
3. We note your disclosures regarding the status of your financial
reporting and remind you of your reporting requirements of Section
13(a) of the Securities Exchange Act of 1934. Please file any
delinquent periodic reports as soon as possible.
Financial Statements
Report of Independent Registered Public Accounting Firm
4. We note from your financial statements beginning on page 15 of
your Form 10-K that you have experienced operating losses of
$253,245
and $84,348 during the years ended December 31, 2004 and 2003,
respectively and had net operating cash outflows of $295,755 for
the
year ended December 31, 2004. We further note your disclosure on
page 22 that your loan with United Lending Partners was in default
as
of the date of the filing. In light of these factors and the
uncertainty of your future business plan as described beginning on
page 8, please tell us how your independent accountants determined
that you had that ability to continue as a going concern for a
period
of at least one year from the balance sheet date.
5. Please have your independent accountants revise their report to
include the firm`s signature. Refer to Rule 2-02 of Regulation S-
X.
6. Please revise your plan of operation to include a discussion of
how long you can satisfy your cash requirements and whether you
believe you will have to raise additional funds in the next twelve
months. Refer to Item 303 (a)(1)(i) of Regulation S-B.
Statements of Cash Flows, page 18
7. Please tell us how your loss on loan default resulted in both a
net cash outflow of $100,000 for investing activities and a
$100,000
positive adjustment to reconcile net income to net cash used in
operating activities.
8. Please tell us what is intended by the investing activities
cash
outflow of $62,843 for the year ended December 31, 2003 that is
titled "loans made". It is unclear whether this amount represents
mortgage loans originated by you, a loan extended by you to a
related
or third party, or some other sort of transaction.
Note 8. Related Party Transactions, page 21
9. Please tell us how you accounted for the reciprocal swap with
Capital Lending Strategies, LLC and provide any journal entries
and/or supporting calculations that would facilitate our
understanding of the transaction.
10. We note that you extended the maturity date of your loan
payable
to United Lending Partners two times since inception and that the
loan is currently in default. Please tell us how you evaluated
whether each modification of the due date of this debt was
considered
a troubled debt restructuring. Refer to EITF 02-4 and SFAS No.
15.
Please also tell us how you accounted for each of the debt
maturity
modifications.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Controls and Procedures, page 23
11. Please tell us how you determined that your disclosure
controls
and procedures were effective as of December 31, 2004 in light of
the
financial reporting issues you disclose on page 11.
* * * * * * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Lisa Haynes, Staff Accountant, at (202) 551-
3424
or me at (202) 551-3492 if you have questions.
Sincerely,
John P. Nolan
Accounting Branch Chief
CC: Doug Berman, Esq via facsimile to (214) 855-4300
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Jack (J.D.) Draper
FIRSTPLUS Financial Group, Inc.
December 2, 2005
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