Replies to post #1115 on FirstPlus Financial Group (fka FPFXQ)

[malp2009]

I would not say that I have a lot of expertise in this area, but I am aware that there is some value in acquiring a company with a NOL carryforward.

A net operating loss (NOL) is a valuable asset because it can lower a company’s future taxable income. For this reason, the IRS restricts using an acquired company simply for its NOL’s tax benefits. Section 382 of the Internal Revenue Code states that if a company with a NOL has at least a 50% ownership change, the acquiring company may use only part of the NOL in each concurrent year. However, purchasing a business with a substantial NOL may mean a larger sum of money going to the acquired company’s shareholders than if the acquired company possessed a smaller NOL.

Congress enacted section 382 to prevent trafficking in losses. The rule surrounding section 382 are quite complex, often misunderstood, and driven by unique facts and circumstances surrounding each particular company and transaction.

So, I guess, Firstplus could be sold for some value to some company because of the NOL.

But, getting the trustee to do that, seems almost impossible, to me. Note that the trustee, I believe, did nothing to claim our rewards from the items repossessed from the criminal trial. So, at this point I do not think that we are going to get anymore effort out of the trustee to create any more value for us shareholders, creditors, victims.