FOG CUTTER CAPITAL GROUP INC. ANNOUNCES DISMISSAL OF APPEAL AND SETTLEMENT OF DERIVATIVE LAWSUIT – 2006 DIVIDEND TREATMENT ALSO ANNOUNCED
January 3, 2007
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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) 778-5218 Everett Jack, – Davis Wright Tremaine, LLP
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For Immediate Release
FOG CUTTER CAPITAL GROUP INC. ANNOUNCES DISMISSAL OF APPEAL AND SETTLEMENT OF DERIVATIVE LAWSUIT – 2006 DIVIDEND TREATMENT ALSO ANNOUNCED
PORTLAND, Oregon.— January 3, 2007 -- Fog Cutter Capital Group Inc. (OTC: FCCG) announced that a settlement has been reached in the derivative lawsuit initiated by shareholder Jeff Allan McCoon against the Company’s directors and others. The settlement has been approved by the Oregon Circuit Court and the Oregon Court of Appeals has granted Mr. McCoon's motion to voluntarily dismiss a pending appeal.
"The conclusion of this matter will allow the Company’s management and directors to focus on its business strategy without further distraction and expense," stated Andrew Wiederhorn, Fog Cutter's Chairman and Chief Executive Officer.
On a separate matter, Fog Cutter Capital Group Inc. has determined that the Company’s distributions to shareholders made during 2006 should be classified as “return of capital” distributions for tax purposes. During 2006, Fog Cutter made payments to stockholders of $0.13 per share.
The distributions made during 2006 will be reported to the IRS in Box 3 of Form 1099-DIV, “Non-Dividend Distributions”. Shareholders are encouraged to consult with their tax advisors for information regarding the specific tax treatment of these distributions.
Fog Cutter Capital Group currently conducts its operations in five business segments: (1) restaurant operations through its Fatburger subsidiary; (2) commercial real estate mortgage brokerage operations through its subsidiary, George Elkins Mortgage Banking Company; (3) manufacturing activities conducted through its DAC International subsidiary; (4) real estate operations; and (5) software development and sales conducted through its Centrisoft Corporation subsidiary.
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, effectiveness of operating initiatives; success in advertising and promotional efforts; changes in global and local business and economic conditions, including their impact on consumer confidence; fluctuations in interest rates and to a lesser degree currency exchange rates; food, labor and other operating costs; competition, including pricing and marketing initiatives and new product offerings by the Company’s competitors; consumer preferences or perceptions concerning the Company’s product offerings; spending patterns and demographic trends; availability of qualified personnel (including restaurant personnel); severe weather conditions; existence of positive or negative publicity regarding the Company or its industry generally; the real estate market; the availability of real estate assets at acceptable prices; the opportunities in the specialty lending market; the creditworthiness and default experience of the Company's borrowers; the availability of financing; interest rates; European markets; effects of legal claims or Nasdaq or government investigations; cost and deployment of capital; changes in future effective tax rates; changes in governmental regulations; the impact of changes in management and changes in applicable accounting policies and practices. The foregoing list of important factors is not all-inclusive. 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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