From latest FPFX filing at pinksheets, this is an excerpt detailing the company side of the FPFX story. Many disgruntled shareholders view it as a revisionist version, but at least the company is communicating with shareholders again, after being forced by a Nevada judge to hold a shareholder meeting and election of directors. This is only an excerpt and I encourage all interested to read the entire filing as well as other recent filings.
Letter From the Chairman of the Board
The New FirstPlus. Our company is at an important crossroads in its history. In the late 1990s, we became one of the largest mortgage providers in the country. When the securitization market collapsed in 1998, our major operating subsidiary, FIRSTPLUS Financial, Inc. was forced to declare bankruptcy. All of our other operating units were shut down, sold or liquidated. Only the parent company, FIRSTPLUS Financial Group, Inc., remained.
For the next few years the company struggled to stay alive. Decisions made by the Board of Directors focused on two major areas. One was survival and establishing a new business plan and the other was to protect shareholder interest and repay creditors.
The most critical decision came in 2001 when the company established the FIRSTPLUS Financial Group, Inc. Grantor Residual Trust (the "Grantor Trust") as a recipient of distributions on the FPFG Intercompany Claim in the FIRSTPLUS Financial, Inc. bankruptcy, which is based on payments from a previous series of securitized loan pools that had been sold in the marketplace. At that time, the amount and timing of each cash flow from residuals was completely unknown. However, this process was the only way to protect shareholder equity and was the best alternative for large creditors to recover some of their investment. We believed that bankruptcy filing could have wiped out shareholder equity.
Cash flow from the residuals is expected to flow into the Grantor Trust this year, and we expect the Grantor Trust to distribute $3.5 million to shareholders shortly after cash is paid from the residuals to the Grantor Trust. The remainder cash from the residuals will be dedicated to settling creditor claims, rebuilding the company's capital base and other expenses.
Another important milestone in the rebirth of FIRSTPLUS came in 2003 when the company invested most of its then existing resources into Capital Lending Strategies, LLC, a startup company that provides financial and risk services offering insured loan programs to financial institutions. When Capital Lending brought in other major investors, FIRSTPLUS was able to sell its interest for a better than three-fold return in a relatively short period of time. As our capital base continues to improve, we will be able to explore additional opportunities in the financial services industry.
We're headed for the future! Our strategy has allowed FIRSTPLUS to be in a position to re-emerge in the marketplace. We would like to share our thoughts about what resides at the core of the new FIRSTPLUS and what motivates us and drives our ability to succeed.
Commitment to Shareholders. FIRSTPLUS is committed to improving all aspects of growth and development. Part of this commitment includes restoring an open line of communication with
--------------------------------------------------------------------------------
shareholders. In 2005, FIRSTPLUS launched a Web site, www.firstplusgroup.com, which addresses many of the myths and misunderstandings that have arisen absent formal communication from the company. We believe that the site provides frank and thorough responses to many questions from shareholders.
Moving Forward. We look at 2005 and the years beyond with confidence and optimism. In 2005, we began curing items and set the stage for a new strategic direction. Simply put, we are confident in our strengths. FIRSTPLUS has the confidence of an established network and is positioned for success in an improving market.
We have every reason to believe 2006 will be a solid year for us to step into the future. We know one of our biggest challenges is rebuilding confidence in the ability of FIRSTPLUS to succeed. We believe our experience and integrity will earn trust and build support for our plans for growth.
Communicating with our shareholders will allow us to share our success and enable shareholders to track our progress. There are a number of current and future issues and obstacles to overcome, but we are confident that we can prevail.
As a final note, I wish to thank our shareholders for their patience and my fellow Directors for their dedication and assistance during some very trying and difficult times. I also wish to thank our CEO, J.D. Draper, for the many important activities and issues he has handled so well, particularly in the past year.
Robert P. Freeman
I am only expressing my personal opinions or repeating public information from SEC filings or media outlets-which may or may not be correct. Do your own investigating before investing!
