April 20, 2006
Mail Stop 4561
VIA U.S. MAIL AND FAX 1-503-7214-6501
Mr. R. Scott Stevenson
Chief Financial Officer
Fog Cutter Capital Group, Inc. and Subsidiaries
1410 SW Jefferson Street
Portland, OR 97201
RE: Fog Cutter Capital Group, Inc. and Subsidiaries
Form 10-K for the year ended December 31, 2005
File no. 0-23911
Dear Mr. Stevenson:
We have reviewed the above referenced filings and have the
following
comments. We have limited our review to only your financial
statements and related disclosures and will make no further review
of
your documents. In our comments, we may ask you to provide us
with
information so we may better understand your disclosure. Please
be
as detailed as necessary in your explanation. After reviewing
this
information, we may or may not raise additional 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 on any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10K for the fiscal year ended December 31, 2005
Notes to Consolidated Financial Statements
Note 4 - Business Combinations, page F-12
1. We note that you acquired controlling interests in Fatburger
Holdings, Inc. and Centrisoft Corporation and consolidate the
operations into your financial statements. Tell us how you
accounted
for the minority interests of Fatburger and Centrisoft Corporation
on
your Consolidated Financial Statements. Reference is made to ARB
51
paragraph 15.
Note 25 - Subsequent Events, page F-31
2. We note that you sold seven stand-alone retail locations
subsequent to year end. Tell us what these locations relate to
and
how you have considered paragraph 30 of FAS 144 in accounting for
these locations as held-for sale on your December 31, 2005
Consolidated Statements of Financial Condition and discontinued
operations on your Consolidated Statements of Operations. In
addition, please tell us the amount of gain or loss recognized on
the
sale.
Item 15. Exhibits and Financial Statement Schedules, page 44
3. Considering your significant investments in real estate assets,
we
do not understand why you have excluded Schedule III from your
Form
10-K. Please explain how you considered the requirements of Rule
5-
04 of Regulation S-X in determining that the schedule was not
required or applicable.
Consolidated Statements of Financial Condition, page F-4
4. Please advise us why you have not presented a classified
balance
sheet as required by Rule 5-02 of Regulation S-X or revise your
presentation accordingly.
Consolidated Statements of Operations, page F-5
5. Please revise the presentation of your statements of operations
to
comply with Rule 5-03 of Regulation S-X. In doing so, please
reclassify gains on sales of investment property and interest
earned
on non-operating assets, such as cash and loans to executive
officers, as non-operating income. Please note the presentation
of
results on an operating segment basis should be limited to your
SFAS
131 disclosure in the notes to the financial statements.
* * * *
As appropriate, please respond to these comments within 10
business
days or tell us when you will provide us with a response. Please
file your response on EDGAR. Please understand that we may have
additional comments after reviewing your responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filings reviewed by the staff to be
certain
that they have provided all information investors require for an
informed 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 filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; 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 filings or in response
to
our comments on your filings.
You may contact Kelly McCusker, Staff Accountant, at (202) 551-
3433
or the undersigned at (202) 551-3403 if you have questions.
Sincerely,
Steven Jacobs
Branch Chief
Mr. Stevenson
Fog Cutter Capital Group, Inc.
April 20, 2006
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