Firstplus Financial Group Inc · 8-K · For 11/5/01 · EX-99

Filed On 11/16/01   ·   SEC File 1-13753   ·   Accession Number 899078-1-500458

Current Report   ·   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         November 5, 2001                                       5     21K 
 2: EX-3        Bylaws                                                 9±    41K 
 3: EX-4        4.1 Amended Rights Agreement                           3     15K 
 4: EX-4        4.2 Cert of Designation                                7±    34K 
 5: EX-99       99.1 Press Release                                     2±    13K 

EX-99   ·   99.1 Press Release

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                                                                    EXHIBIT 99.1

                                       CONTACT: Daniel T. Phillips, Chairman/CEO
                                               FIRSTPLUS FINANCIAL GROUP, INC.
                              (214) 231-7600

FIRSTPLUS announces formation of residual trust for shareholders and
 creditors and acquisition of limited liability company interests of
 Freedom Commercial Credit LLC

DALLAS,  November 6, 2001 / FIRSTPLUS  Financial  Group,  Inc. (OTC Pink Sheets:
FPFX) announced today that it is forming a residual trust for the benefit of its
shareholders  and  creditors  and  has  acquired   twenty-five  percent  of  the
outstanding limited liability company interests of Freedom Commercial Credit LLC
("Freedom Commercial Credit"). The acquisition was in exchange for 25,000 shares
of a new series of  convertible  preferred  stock of  FIRSTPLUS  and cash in the
amount of $250,000,  subject to adjustment based on a final valuation of Freedom
Commercial  Credit. The preferred stock is convertible into 45,000,000 shares of
FIRSTPLUS'  common stock at the option of Freedom  Commercial Credit on or after
the first  anniversary  date of the issuance of the preferred  stock,  but votes
with  the  common  stock  prior to  conversion.  As a  result  of the  foregoing
transaction,  Freedom  Commercial  Credit acquired  control of FIRSTPLUS and now
holds approximately 51% of the outstanding voting securities of FIRSTPLUS.  Also
as a result of the  foregoing  transaction,  Freedom  Commercial  Credit has the
right to replace management and the board of directors of FIRSTPLUS.            

In addition,  the terms of the  preferred  stock  provide  that neither  Freedom
Commercial  Credit nor any of its affiliates and assigns will be entitled to any
of  FIRSTPLUS'  rights  in the  cash  flow  from  the  derivative  interests  in
mortgage-backed  or asset-backed  securitization  transactions  ("Residuals") of
FIRSTPLUS  Financial,   Inc.  ("FPFI").   The  transaction  was  based  upon  an
independent  third-party valuation of FIRSTPLUS,  excluding any cash flow rights
from the Residuals.  Consequently,  the appraiser  determined  that there was no
remaining net value in FIRSTPLUS.                                               

As previously disclosed,  FIRSTPLUS' then main operating subsidiary, FPFI, filed
for  reorganization  under  Chapter 11 of the United States  Bankruptcy  Code on
March 5, 1999.  On May 10,  2000,  the  bankruptcy  plan (the  "Plan")  for FPFI
closed.  The Plan,  as approved,  was  initially  filed on July 2, 1999 with the
United States Bankruptcy Court,  Northern District of Texas, Dallas Division. In
connection  with the Plan,  a trust  (the "FPFI  Trust")  was formed in order to
facilitate  implementation of the Plan, into which the assets of FPFI, including
the stock of FPFI owned by FIRSTPLUS,  were  transferred  for the benefit of the
creditors of FPFI,  including FIRSTPLUS.  As a result,  FIRSTPLUS no longer owns
FPFI,  but as a  creditor  of  FPFI  through  its  intercompany  claim,  it is a
beneficiary of the FPFI Trust, last in line behind the other creditors.         

As a beneficiary  of the FPFI Trust,  FIRSTPLUS'  only  significant  asset is an
instrument  representing  its portion of the cash flow rights from the Residuals
held by the FPFI Trust.  The Residuals are illiquid (and encumbered) and may not
produce cash flow to the FPFI Trust for many years,  if ever. In any event,  the
first cash flows from the  Residuals  are  committed to funding a portion of the
monies owed to Plan creditors. Contrary to public speculation, FIRSTPLUS has not
received any cash flows from the Residuals through its cash flow instrument.    

The terms of the preferred stock provide that neither Freedom Commercial Credit,
nor any of its affiliates or assigns,  are entitled to any of the cash flow from
the  Residuals.  The cash flow  instrument  to FIRSTPLUS  will be set aside in a
trust  (the  "Residual  Trust").  The  beneficiary  of  the  Residual  Trust  is
FIRSTPLUS,  for the benefit of its  shareholders  and  creditors,  but excluding
Freedom  Commercial  Credit and its affiliates  and assigns.  The Residual Trust
will be formed by FIRSTPLUS  and managed by a trustee  appointed  by  FIRSTPLUS.
During the term of the Residual Trust,  the trustee will distribute to FIRSTPLUS
all of the net income from the Residual Trust.                                  

Freedom Commercial Credit is a Utah limited liability company,  which, following
the transaction,  is owned 75% by New Freedom Mortgage Corporation. It is in the
business of buying, repackaging and selling mortgage loans.                     

As previously disclosed,  FIRSTPLUS has no operating business and it is unlikely
that FIRSTPLUS will  reconstitute  any of its previous  business plans,  such as
originating mortgage loans, servicing mortgage loan portfolios,  or investing in
mortgage loan portfolios and interest only strips.                              

The above  statements  contained in this press  release that are not  historical
facts,  including,  but not limited to, statements that can be identified by the
use of forward-looking terminology such as "may," "will," "expect," anticipate,"
"estimate," or "continue" or the negative thereof or other variations thereon or
comparable terminology, are forward-looking statements within the meaning of the
Private Securities  Litigation Reform Act of 1995, and involve a number of risks
and  uncertainties.  The actual  results of the future events  described in such
forward-looking  statements in this press release could differ  materially  from
those stated in such  forward-looking  statements.  Among the factors that could
cause  actual  results  to differ  materially  are:  short  term  interest  rate
fluctuations,  level of defaults and prepayments,  general economic  conditions,
competition, government regulation and possible litigation, as well as the risks
and  uncertainties  set forth from time to time in the FIRSTPLUS' public reports
and filings and public statements.                                              

 -End-

Dates Referenced Herein   and   Documents Incorporated By Reference

This 8-K Filing		Date		Other Filings
		3/5/99
		7/2/99
		5/10/00
For The Period Ended		11/5/01
		11/6/01
Filed On / Filed As Of		11/16/01
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