FOG CUTTER CAPITAL GROUP INC. REPORTS SETTLEMENT OF LITIGATION
May 13, 2002
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FOR:
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FOG CUTTER CAPITAL GROUP INC.
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CONTACT:
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Fog Cutter Capital Group Inc.
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(503) 721-6500 Andrew A. Wiederhorn, Chairman and CEO
(503) 721-6500 Lawrence A. Mendelsohn, President, or
(503) 721-6500 R. Scott Stevenson, Chief Financial Officer
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For Immediate Release
FOG CUTTER CAPITAL GROUP INC. REPORTS SETTLEMENT OF LITIGATION
PORTLAND, Oregon- May 13, 2002 - Fog Cutter Capital Group Inc. (Nasdaq: FCCG), an opportunistic investment group specializing in mortgage and real estate related assets, reports that the Company and its two top executives, Andrew Wiederhorn and Larry Mendelsohn, have reached a settlement with the claimants in a series of lawsuits (the "CCL Lawsuits") relating to the receivership of Capital Consultants, L.L.C. ("CCL"). Under the terms of the settlement, the Company and Messrs. Wiederhorn and Mendelsohn are released and discharged from any and all claims, losses or damages arising or in any way related to CCL or any matters raised, or which could have been raised in the CCL Lawsuits. The agreement also provides protection against potential claims which may be made by parties who are not participants in the settlement. The resolution of this litigation eliminates a major commitment of time and legal expense for the Company and will allow for the focused implementation of its opportunistic corporate strategy.
The CCL Lawsuits were filed during the period between October 2000 and April 2001 and named multiple defendants in addition to the Company and its executives. In addition, the claimants have filed other claims against a number of additional parties regarding the same alleged losses, including a number of professional advisors.
The settlement agreement with the Company and Messrs. Wiederhorn and Mendelsohn and the payments to be made thereunder are made in compromise of disputed claims and are not an admission of any liability of any kind. The settlement has an effective date of May 13, 2002, but it is subject to a number of conditions before any funds may be distributed, including, among other things, court approval and the entry of a bar order in each of the CCL Lawsuits pending before the United States District Court for the District of Oregon. The court is expected to conduct a hearing on June 19, 2002.
If the settlement is approved by the court and implemented, the Company's portion of the settlement payment will not have a material impact on its financial position or results of its operations.
Founded in 1997, Fog Cutter Capital Group Inc. focuses on investing, structuring and managing real estate-related assets, including the acquisition of companies engaged in real estate investment activities, mortgage-backed securities, mezzanine real estate loans and other real estate related assets. The Company invests where its expertise in intensive asset management, mortgage and real estate credit analysis and financial structuring can create value. Many of these investments, particularly in corporate acquisitions, are acquired in conjunction with partners.
The Company seeks to invest directly or indirectly in real estate-related assets that provide an appropriate risk-adjusted rate of return and the opportunity for capital gains. The Company maintains a flexible approach with respect to the nature of its investments, seeking to take advantage of opportunities as they arise or are developed.
Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in such statements. All of the statements contained in this release, which are not identified as historical, should be considered forward-looking. In connection with certain forward-looking statements contained in this release and those that may be made in the future by or on behalf of the company which are identified as forward-looking, the company notes that there are various factors that could cause actual results to differ materially from those set forth in any such forward-looking statements. Such factors include but are not limited to, the real estate market, the availability of real estate assets at acceptable prices, the availability of financing, interest rates, and European markets. Accordingly, there can be no assurance that the forward-looking statements contained in this release will be realized or that actual results will not be significantly higher or lower. The forward-looking statements have not been audited by, examined by, or subjected to agreed-upon procedures by independent accountants, and no third party has independently verified or reviewed such statements. Readers of this release should consider these facts in evaluating the information contained herein. The inclusion of the forward-looking statements contained in this release should not be regarded as a representation by the company or any other person that the forward-looking statements contained in this release will be achieved. In light of the foregoing, readers of this release are cautioned not to place undue reliance on the forward-looking statements contained herein.
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