FPFX Shareholder Value Committee
7 Egret Lane
Aliso Viejo, CA 92656
October 13, 2005
Mail Stop 04-09
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Mr. Daniel F. Duchovny
Attorney-Advisor
Office of Mergers and Acquisitions
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 -3628
Re: FirstPlus Financial Group
Revised Preliminary Proxy Statement on Schedule 14A
Filed October 7, 2005 by James T. Capretz, Robert D. Davis,
George R. Eberting, James P. Hanson and Danford L. Martin
(the FPFX Shareholder Value Committee)
SEC File Number 1-13753
Dear Mr. Duchovny:
I am in receipt of your letter dated October 12, 2005 regarding the Revised
Preliminary Proxy Statement filed by the above-referenced shareholders (the
"Participants") in connection with the solicitation of proxies in connection
with the upcoming Special Meeting of Shareholders (the "Meeting") of FirstPlus
Financial Group, Inc. (the Company"). We respond to your comments as follows:
1. Members of our Group (per Rule 13d-5(b)(1) Your letter asked us how
our group was formed and an analysis regarding whether there are
additional persons who should be identified as members of our group,
and if any of us obtained authorization to act on behalf of any other
shareholder petitioners.
As stated in our Schedule 14A, in March 2005, 73 shareholders of FirstPlus filed
a Petition to order an election of directors in the Second Judicial District
Court, Nevada, as provided for by NRS 78.345. These FirstPlus shareholders
demanded their rights to annual shareholder meetings, along with audited
financial statements. There are no agreements among the petitioners to acquire,
hold, vote, or dispose any equity securities of FirstPlus. Prior to the
commencement of the lawsuit, each petitioner executed and delivered to me a
Consent to Representation and Limited Power of Attorney (the "Limited Power of
Attorney"). The form of the Limited Power of Attorney is enclosed as Enclosure
No. 1. Section 3(g) of the Limited Power of Attorney provides that "This Power
of Attorney does not confer upon Martin the power to nominate a Board of
Director on behalf of the Undersigned." Moreover, Section 3(h) of the Limited
Power of Attorney states that "This Power of Attorney does not confer upon
Martin the power to vote for a Board of Director on behalf of the Undersigned."
The Limited Power of Attorney provides no right to vote to any person. Nor does
the Limited Power of Attorney constitute an agreement to vote a particular way.
In May 2005, I decided to form a group specifically to nominate an opposing
slate of Directors, and with the intent to solicit votes upon the approval of
our Schedule 14A. I directly approached seven (7) shareholders whom I thought
were qualified business persons with a diversity of experiences and skills, and
who could contribute the time and financial resources such an undertaking would
entail. This was an extremely selective process among shareholders both within
and without the petitioners. I selected five such persons among the petitioners
and one (Mr. James T. Capretz) who was not a petitioner, who agreed to form such
a group. These seven (including me), consisted of 3 CPA's, 3 Businessmen, and 1
Attorney. I invited one additional shareholder, Kenneth Bolster, to participate
in the Committee, but he declined. Only these seven (7) shareholders agreed to
act together for the purpose of holding and or voting equity securities of
FirstPlus (and to solicit votes). As stated in our Form 14A (see last paragraph
of "REASONS FOR SOLICITATION", page 5):
Subsequently on July 13, 2005, a "Notice of Nomination" nominating seven (7)
Directors was sent to the Company and their Counsel, as within the last two
years, the Company had as many as 7 Directors. The Company's legal counsel
notified the Committee's legal counsel that only 4 Directors will be elected at
the up-coming special meeting. On July 27, 2005 a re-constituted Committee sent
the Company a revision to the "Notice of Nomination" resulting with the
nomination of four (4) Committee Nominees: (1) Danford L. Martin, (2) James T.
Capretz, (3) James P. Hanson, and (4) Robert D. Davis who are nominated for an
opposing slate to Company's nominated director candidates.
On July 24, 2005, one of the seven shareholders, Douglas H. Baskett, resigned
from the group, so on July 27, 2005 only 6 submitted nominations to the Company,
and filed the initial Form 14A. Recently one more member of the Committee, Rupen
Gulenyan, resigned (copy of resignation letter previously supplied to you),
thereby only 5 members currently remain in the FPFX Shareholder Value Committee.
As reflected in the Committee's Amended Schedule 13D, only five individuals
belong to the Committee and will be authorized to solicit proxies on behalf of
the Committee.
Many of the petitioners in the court petition, together with some
non-petitioners, have contributed funds for the prosecution of the court
petition. The funds that have been contributed for the prosecution of the court
petition have not been applied to the Committee's expenses. Committee's funds
have all come from members of the Committee, and have been maintained in a bank
account separate from the funds for the prosecution of the court petition.
As each member in the Committee was approached directly and specifically by me;
there are no obligations or commitments from the members of our group to
represent any other shareholder (within or without the petitioners). Other than
in connection with the Limited Power of Attorney described above, none of the
Committee's members has obtained any authorization to act on behalf of the other
shareholder petitioners or any other shareholders. The Limited Power of Attorney
is not an agreement to act together for purpose of acquiring, holding, voting,
or disposing of equity securities of FirstPlus.
Sincerely,
/s/ Danford L. Martin
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Danford L. Martin
FPFX Shareholder Value Committee
7 Egret Lane
Aliso Viejo, CA 92656
Cc: Nathan Jenkins, Jerry Carter, Committee Members
Enclosure:
1. Form of Consent to Representation and Limited Power of Attorney
Enclosure No. 1
CONSENT TO REPRESENTATION
AND LIMITED POWER OF ATTORNEY
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WHEREAS:
(1) The Undersigned is a shareholder of FirstPlus Financial Group, Inc.
("FirstPlus"), a Nevada corporation;
(2) The Undersigned has the capacity, as a shareholder of FirstPlus, to
give consent to legal representation on behalf of the Undersigned in matters
relating to the Undersigned's rights and privileges as a shareholder of
FirstPlus;
(3) The Undersigned has the capacity, as a principal acting on his own or
her own behalf, to confer upon a third-party a limited power of attorney for the
purpose of acting on behalf of the Undersigned in matters relating to the
Undersigned's rights and privileges as a shareholder of FirstPlus;
(4) The Undersigned understands that FirstPlus has not held an election of
its Board of Directors in over eighteen (18) months;
(5) The Undersigned, in the capacity of a shareholder of FirstPlus desires
that a new election ("Election") of FirstPlus' Board of Directors be held as
soon as possible and that new and different directors be elected to the Board of
Directors than are currently serving as directors;
(6) The Undersigned desires to compel the Election by resort to Court
Action, as soon as possible;
(7) The Undersigned understands that Danford L. Martin ("Martin"), in his
capacity as a shareholder of FirstPlus, is initiating a court action ("Court
Action") against FirstPlus to compel the Election;
(8) The Undersigned understands that Martin has retained the law firm of
Brooke-Shaw-Zumpft, located at 1590 Fourth Street, Suite 100, Minden, Nevada,
Telephone 775-782-7171, to prosecute the Court Action and to subsequently assist
with the holding of the Election, as may be necessary;
(9) The Undersigned understands that Martin will be liable for legal fees
and expenses incurred by Brooke-Shaw-Zumpft in the prosecution of the Court
Action and the provision of any subsequent legal assistance relating to the
Election, as may be necessary;
(10) The Undersigned desires to support and advance the efforts of Martin
and Brooke-Shaw-Zumpft in the prosecution of the Court Action and the holding of
the Election to elect new and different board members and to cooperate fully
with Martin and Brooke-Shaw-Zumpft in this regard; and
(11) The Undersigned desires that the Court Action and Election proceed as
quickly and efficiently as possible;
IT IS HEREBY AGREED AS FOLLOWS:
(1) Consent To Commence Court Action And Election.
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The Undersigned hereby consents to the commencement of the
aforementioned Court Action and Election and further agrees to and requests that
the Undersigned be named as a Plaintiff in the aforementioned Court Action, with
the understanding that the Undersigned will not incur any debts or liability in
connection with the prosecution of the Court Action.
(2) Consent To Legal Representation.
--------------------------------
The Undersigned hereby consents to being represented in the Court
Action (and subsequent Election, as may be necessary) by the law firm of
Brooke-Shaw-Zumpft, with the understanding that the Undersigned will not incur
any debts or liability in connection with Brooke-Shaw-Zumpft's prosecution of
the Court Action or assistance with the Election.
(3) Limited Power Of Attorney
-------------------------
The Undersigned hereby confers upon Martin a limited power of
attorney ("Power of Attorney") to act on behalf of the Undersigned in all
matters relating to or arising from the commencement, prosecution, and
completion of the aforementioned Court Action and Election as below specified.
a. This Power of Attorney specifically confers upon Martin the right
to freely and solely make all client decisions on behalf of the Undersigned, in
connection with the prosecution of the aforementioned Court Action and holding
of the aforementioned Election;
b. This Power of Attorney specifically confers upon Martin the right
to instruct Brooke-Shaw-Zumpft on client matters arising in the course of
the prosecution of the Court Action and holding of the Election, on behalf of
the Undersigned;
c. This Power of Attorney specifically confers upon Martin the right
to sign all court documents and move the court to take further necessary and
appropriate action on behalf of the Undersigned, in connection with the
prosecution of the aforementioned Court Action and holding of the aforementioned
Election;
d. This Power of Attorney specifically confers upon Martin the right
to initiate and receive all communications, whether written or oral, with
Brooke-Shaw-Zumpft on behalf of the Undersigned, who will not be independently
consulted or communicated with on these matters;
e. This Power of Attorney specifically confers upon Martin the right
to take all further necessary and proper action to effect the prosecution,
completion, and winding up of the Court Action and the holding of the Election.
f. This Power of Attorney does not confer upon Martin the power to
secure credit or incur debts or liability on behalf of the Undersigned;
g. This Power of Attorney does not confer upon Martin the power to
nominate a Board Director on behalf of the Undersigned; and
h. This Power of Attorney does not confer upon Martin the power to
vote for a Board Director on behalf of the Undersigned.
(4) Termination Of Limited Power Of Attorney
----------------------------------------
This Power of Attorney shall automatically expire and terminate
upon the completion, conclusion, and winding-up of the aforementioned Election
or the Court Action, whichever occurs later.
However, this Power of Attorney shall remain in full force and
effect to a later time, as may be necessary, if the Election or Court Action
occur, proceed, or resolve in such a manner that Martin, in his sole discretion,
deems it necessary to further contest or continue the Election (collectively,
"Election Follow-up") or to file an appeal ("Appeal") of the Court Action or to
take independent and subsequent court action(s) ("Subsequent Court Action(s)")
to effect the goal of electing a new and different board of directors of
FirstPlus than are currently serving as board members.
In such circumstances requiring the commencement or prosecution of
any Election Follow-up, Appeal, or Subsequent Court Action(s), this Power of
Attorney shall remain in full force and effect until the completion, conclusion,
and winding-up of the Election Follow-up, Appeal, or Subsequent Court Action(s)
whichever occurs later.
(5) Reservation Of Right To Withdraw From Court Action
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The Undersigned reserves the right to withdraw ("Withdrawal") from
any action or actions commenced in connection with this Consent and Power of
Attorney, provided that oral or written notice ("Notice") of the Undersigned's
Withdrawal is provided to Martin. The Withdrawal will be effective upon Martin's
receipt of the Notice. However, in circumstances of the Undersigned's
Withdrawal, the Power of Attorney shall remain in effect for the limited purpose
of securing and completing the Withdrawal, including the filing of necessary
court papers and motions with the Court and FirstPlus to effect the Withdrawal.
SIGNATURE PAGE
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I have read and understand the foregoing Consent To Representation and Limited
Power of Attorney, and freely consent to the terms contained herein.
I further warrant that, at the time of the signing of this document, I currently
own the following shares of stock of FirstPlus:
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NUMBER OF SHARES TYPE OF SHARES
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(Please list separately on different lines the
different types of stock that you own, as may
apply to you. If you do not own the type of
stock listed on the row, please enter zero (0)
in the "Number of Shares" column.)
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Preferred Stock, Series "A"
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Preferred Stock, Series "B"
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Common Stock
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Non-Voting Stock
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Other:
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Dated this ___ day of ___________________, 2005
________________________________________ ________________________________________
Signature (matching Certificate/Account) Signature (matching Certificate/Account)
________________________________________ ________________________________________
Printed Name (per Certificate/Account) Printed Name (per Certificate/Account)
Street Address: ________________________________________________________________
City: ____________________________, State:____________________ Zip: ____________
Phone: _________________ Fax.:_________________ E-Mail: ___________________