Exhibit 1.2




FOR IMMEDIATE RELEASE

        FOG CUTTER CAPITAL GROUP INC. ANNOUNCES RESIGNATION OF PRESIDENT
                             LAWRENCE A. MENDELSOHN

PORTLAND, Ore.--September 3, 2002- Fog Cutter Capital Group Inc. (Nasdaq: FCCG),
a diversified investment group specializing in mortgage and real estate related
assets, has announced the resignation of Lawrence A. Mendelsohn as President and
as a member of the Board of Directors. Mr. Mendelsohn resigned to pursue other
business interests. The resignation was effective August 30, 2002.

Mr. Mendelsohn served as President and a director of the Company since its
formation in 1997. In those capacities, he played a key role in refocusing the
company's energies and implementing its revised strategic plan beginning in
January, 2001.

Fog Cutter Capital Group Inc. appreciates Mr. Mendelsohn's years of service. It
has been aware for some time that he desired to pursue other interests and
wishes him well in those pursuits. He and his family remain significant FCCG
shareholders.

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.