Company Press Releases

FirstPlus Financial Group, Inc. Launches Chapter 11 Case To Enhance Liquidity While It Reorganizes

Expected to Commence its Business Plans

BEAUMONT, Texas, June 24 /PRNewswire-FirstCall/ --  The Board of Directors of FirstPlus Financial Group, Inc. (Pink Sheets: FPFX.PK), announced today FirstPlus has filed a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division to enhance liquidity while it reorganizes.

The filing was precipitated by a series of events that led to a contraction in FirstPlus’ liquidity, impairing its ability to commence its new business plans and continue operations. These series of events include mounting litigation costs, other claims and the fact that the Company is not realizing any revenue from its subsidiaries. This lack of liquidity was also due to a temporary injunction entered by the Second Judicial Court of Washoe County, Nevada ordering the Company to pay into the registry of that Court all of the proceeds from a distribution the Company had received from the FPFI Creditor Trust. These funds were to be used by the Company for a planned distribution to shareholders and for working capital purposes. These series of events resulted in severe constraints on the Company’s liquidity position. Faced with these constraints, FirstPlus filed a voluntary chapter 11 petition to facilitate access to additional liquidity while it reorganizes to take better advantage of FirstPlus’ position to commence its business plans.

Subject to the Bankruptcy Court’s approval, FirstPlus will retain Cox Smith Matthews Incorporated as the Company’s bankruptcy counsel. The Company anticipates asking the Bankruptcy Court to approve the continued retention of some or all of its advisors and special counsel to assist the Company in connection with pending litigation, S.E.C. compliance, and other ancillary matters.

“Today’s filing allows FirstPlus to address its short-term liquidity constraints as we navigate an historically challenging environment while we focus on restructuring to address the company’s long-term business plans,” Robert O’Neal, Chairman and President said. “We appreciate the loyalty of our directors and advisors during this challenging time.”

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning future business conditions and the outlook for FirstPlus Financial Group, Inc. (the "Company") is based on currently available information that involves risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the Company's expectations concerning the bankruptcy process and the commencement of its business plans. The Company's actual results could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, including, without limitation, (1) the impact of today's announcement on the Company's business plans; (2) the ability of the Company to fund and execute its business plans;(3 ) the ability of the Company to continue as a going concern; (4) the ability of the Company to obtain approval of and operate pursuant to the agreement with its secured creditor for the use of its cash collateral; (5) the ability of the Company to obtain court approval of the Company's first day papers and other motions in the Chapter 11 proceeding pursued by it from time to time; (6) the ability of the Company to develop, pursue, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; (7) risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, or the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; (8) the ability of the Company to obtain and maintain normal terms with service providers; (9) the ability of the Company to maintain contracts that are critical to its operations; (10) potential adverse developments with respect to the Company's liquidity or business plans;(11) the ability of the Company to retain and compensate key executives, advisors and other key personnel; (12) the ability of the Company to attract and retain customers; and (13) any further deterioration in the macroeconomic of consumer lending services environment or consumer confidence. Each forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, except as required by law.

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FIRSTPLUS Financial Group, Inc. Issues Shareholder Update

BEAUMONT, Texas, May 11 /PRNewswire-FirstCall/ --  The Board of Directors of FIRSTPLUS Financial Group, Inc. ("FPFG") (Pink Sheets: FPFX.PK), acting on the recommendation of its Chairman, Robert O’Neal, and its recently appointed Audit Committee members, William Hickman and Paul Ballard, have undertaken a new communication initiative designed to provide periodic updates to shareholders concerning several matters of ongoing interest. These ”Shareholder Updates” will be posted on the Company’s website at http://firstplusgroup.com and will deal with issues relating to shareholder distributions, government and company investigations into allegations relating to transactions affecting the company and directed by elements of organized crime, and company improvements in its internal controls.

Shareholder Distribution Initiatives

On February 13, 2009, James P. Hanson, for himself and purportedly on behalf of other FPFG shareholders, filed a lawsuit in Nevada state court seeking, among other things, to enforce a 2006 settlement agreement between FPFG and its shareholders which requires certain annual distributions to be made by FPFG to the shareholders from funds received by the FPFG Grantor Residual Trust from the FPFG Creditor’s Trust. The lawsuit requests class certification for the plaintiffs, but it has not been certified as a class action at this time.

On March 26, 2009, the plaintiff filed a motion for preliminary injunction, which the Court granted on April 10, 2009. The preliminary injunction prohibits FPFG from disbursing any funds received or to be received by the Grantor’s Trust from the Creditor’s Trust, and requires FPFG to deposit those funds into the registry of the Court. This action by the Court, at the Plaintiff’s request, immediately enjoined FPFG from proceeding with its prior announced distribution of previously earmarked funds to the shareholders. FPFG has filed a motion requesting the Court to reconsider its ruling on the preliminary injunction, and/or to narrow the scope of the injunction so that FPFG can distribute these previously earmarked funds to the shareholders and to allow the company to have access to necessary funds in order to carry on its day-to-day activities. This motion is currently pending.

Department of Justice Investigation

The Company continues its cooperation with the United States Attorney’s Office in New Jersey into allegations that individuals associated with organized crime in the Pennsylvania/New Jersey area orchestrated sales of several businesses controlled by the same organized crime figures to FPFG at inherently unfair terms in 2007. FBI agents executed search warrants in 2008 at various locations in Texas and Pennsylvania and those records remain under review by the United States Attorney’s Office in Camden. Importantly, the Company has been advised that it is not a target of that criminal investigation. However, two current Board members have been advised that they are targets. (According to the U.S. Attorney Manual, a "target" is "a person to whom the prosecutor or grand jury has substantial evidence linking him or her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant...") In addition, other individuals, including two individuals associated with organized crime, are being investigated for possible criminal charges.

Key insight into the investigation was gained by FPFG from reading the sentencing letter filed by Assistant U.S. Attorney Steve D’Aguanno on September 11, 2008 in a related criminal prosecution styled U.S. v. Daniel Daidone. Mr. D’Aguanno’s letter reveals how the Government’s investigation, using wiretaps and seized documents, seeks to unravel the transactions that were allegedly orchestrated by the organized crime members who assumed control of FPFG.

In very graphic terms, Mr. D’Aguanno’s letter reveals Mr. Daidone’s affiliation with prominent members of the Philadelphia La Cosa Nostra, including its boss Nicodemo Scarfo, Sr. It details Mr. Daidone’s employment with a company called CST Soil Solutions and his affiliation in 2007 with Salvatore Pellulo and Nicodemo Scarfo, Sr. (Salvatore Pellulo has a prior federal conviction in 1999 for bank fraud and making a false statement to the SEC, and a 2002 federal conviction for wire fraud in New York. Nicodemo Scarfo, Sr., and his son Nicodemo Scarfo, Jr. also have federal convictions.)

Mr. D’Aguanno’s September 11, 2008 letter then states: “In early June 2007, a group of individuals headed by Pellulo and Nicodemo Scarfo, Jr. assumed control of a company named FIRSTPLUS FINANCIAL GROUP, INC (“FPFG”), a financial services corporation located in Dallas, Texas. Following the takeover, (Harold) Garber (a close associate and attorney for Scarfo, Sr.) was named the chairman of the new board of directors. A June 14, 2007 wiretapped conversation, detailed in Mr. D’Aguanno’s sentencing letter, reveals Scarfo, Sr. and Scarfo, Jr. discussing Garber’s takeover of FPFG as an associate of the Scarfos.

Mr. D’Aguanno’s letter then outlines how FPFG, under Garber’s direction, created a subsidiary called Rutgers Investment Group. Inc which then entered into a transaction to purchase Rutgers LLC, an entity controlled by Pellulo and Scarfo, Jr. through two other corporate entities. Mr. D’Aguanno’s letter then states: “A review of bank records related to this transaction, as well as other transactions, has revealed that FPFG transferred several millions of dollars between June 2007 and May 2008 to corporate entities controlled by Pellulo and Scarfo, Jr., including Rutgers LLC.”

Likewise, FPFG remains vitally interested in discovering the details of these transactions to determine what remedies might be undertaken on behalf of its shareholders.

As noted above, besides his focus on Messrs. Pellulo, Scarfo, Jr., Scarfo, Sr., Garber, and Daidone in connection with FPFG transactions, Mr. D’Aguanno has issued target letters to two current FPFG Board members, Mr. John Maxwell and William Handley. Mr. Maxwell has in turn, according to a Philadelphia Inquirer article published on April 11, 2009, “lashed out” at the FBI and the U. S. Attorney’s Office in New Jersey.

The Board of Directors has removed Messrs. Maxwell and Handley from their officer positions within FPFG. Under applicable law, FPFG cannot remove Messrs. Maxwell and Handley from their Board positions. In order to effectively remove Messrs. Maxwell and Handley, the Board, in anticipation of an annual meeting of shareholders, has nominated a slate of directors that do not include Messrs. Maxwell and Handley.

Planned Annual Meeting of Shareholders

FPFG is also currently attempting to recover company records seized by the FBI during the 2008 search warrants and to reconstruct the same transactions being investigated by the Department of Justice. Without access to these records, reconstruction has been difficult, but FPFG remains committed to this process which is also necessary in order for current financial statements to be prepared. These financial statements are required before the company’s outside auditors can audit these statements which must be accomplished before the annual meeting of shareholders can be convened.

Revision of Internal Controls

The current FPFG Chairman, Robert O’Neal, recommended the appointment of two independent outside Board members to serve on the FPFG Audit Committee. Those members, William Hickman and Paul Ballard, have recently undertaken several important new internal control features and recommended that they be implemented by FPFG. They are:

1. Revision to the Code of Ethics;

2. Adoption of an Insider Trading Policy;

3. Adoption of a Related Party Policy;

4. Implementation of an Annual Disclosure and Certification Form to be completed by Board Members and Officers.

These documents can be found under the Corporate Governance section of the website.

The Audit Committee has also instituted new procedures with respect to outside auditor engagement and oversight, and has taken some of the initiatives designed to reconstruct financial information currently unavailable to the Company since many Company records remain in the possession of the U. S. Attorney’s Office as a result of prior search warrants. Company counsel has requested the return of these records.

SEC Compliance

FPFG management in consultation with Buckno Lisicky & Company, P.C., FPFG’s independent registered public accounting firm, have been actively in communication with the staff of the SEC concerning the revision of FPFG’s previous annual and quarterly financial statements included in FPFG’s Form 10-KSB for 2007 and its Form 10-QSB for the quarter ended June 30, 2008. After these communications with the SEC staff have been completed, FPFG plans to revise these previous filings and prepare its other quarterly and annual filings and have them filed them with the SEC. Additionally, since the beginning of the year, FPFG has made numerous Form 8-K filings with the SEC in order to keep all shareholders informed of important FPFG events.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the "safe harbor" provisions under Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. The Company uses forward-looking statements in its description of its plans and objectives for future operations and assumptions underlying these plans and objectives, as well as in its expectations, assumptions, estimates and projections about the Company's business and industry. These forward-looking statements involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors as more fully described in this report.

Forward-looking terminology includes the words "may," "expects," "believes," "anticipates," "intends," "projects" or similar terms, variations of such terms or the negative of such terms. These forward-looking statements are based upon the Company's current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. The Company expressly disclaims any obligation.

FIRSTPLUS Financial Group, Inc. Continues Cooperation with U. S. Department of Justice in Ongoing Investigation/a>

BEAUMONT, Texas, April 6 /PRNewswire-FirstCall/ -- The Board of Directors of FIRSTPLUS Financial Group, Inc. ("Company") (Pink Sheets: FPFX.PK - News) announced the Company is working with its stock transfer agent to make a distribution to shareholders of certain funds held by FirstPlus Financial Group, Inc. Grantor Residual Trust.

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