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MAIL STOP 4-6

      February 23, 2005

David G. Latzke
Senior Vice President, Chief Financial Officer
     and Secretary
SoftBrands, Inc.
Two Meridian Crossings, Suite 800
Minneapolis, Minnesota 55423

Re:	SoftBrands, Inc.
	Form 10 filed January 14, 2005
	File No. 0-51118

Dear Mr. Latzke,

       We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

General
1. Please note that your registration statement will become
effective
by operation of law 60 days after it was filed pursuant to Section
12(g) of the Exchange Act.  However, we will continue to review
your
registration statement after the effective date, until all
comments
have been resolved.  Once a registration statement becomes
effective,
you are responsible for making public filings, including but not
limited to, quarterly and other reports required by Section 13 of
the
Exchange Act and proxy statements required by Section 14 of the
Exchange Act.

Item 1.  Business, page 8
Background and Development of Business, page 8

    Development of Business, page 9
2. Please supplementally provide support for your belief that
Fourth
Shift has the reputation as a leading and stable enterprise
resource
planning system for mid-sized manufacturers and that SoftBrands is
one of the leading ERP suppliers in China, on page 14.
Additionally
expand to state concisely the basis on which the leadership claim
is
made.  Similarly, you should provide the basis of your belief that
SAP is the largest enterprise software company in the world.  Does
SAP refer to itself as the largest enterprise software company in
world?
Manufacturing Software Operations, page 9

    Products, page 10
3. Please revise to more clearly explain whether your products
work
independently from each other or may work in conjunction with each
other.  Also, you should discuss the interoperability of your
products with established software platforms.
4. You disclose that SoftBrands "agreed to a significant joint
initiative with SAP to address the software application needs to
medium-sized manufacturing companies."  Please revise to further
explain your relationship with SAP.  In this regard, you should
explain the roles of each party in the relationship and explain
how
your relationship with SAP gives you access to the distribution
capacity of SAP and provides an opportunity to sell SoftBrands
solutions to SAP`s enterprise customers.

Sales and Marketing, page 14
5. We note that you have contracts with approximately 25 resellers
and referral partners.  Please revise to more fully describe the
relationships with your resellers and referral partners and your
dependence upon them.  For example, what are the general terms of
your arrangements?  Do you have long-term agreements with them?
What
is the compensation structure?  Are you substantially dependent
upon
any of these agreements?  Please provide substantially similar
disclosure under "Sales and Marketing" on page 18, as applicable.

Hospitality Software Operations, page 16

    Products, page 16
6. Briefly discuss the acquisition of the Medallion intellectual
property rights in 2003. Please disclose the material terms of
your
agreement with RekSoft.
7. Please revise your disclosure to more clearly differentiate
your
Medallion and PORTfolio products.  How do Medallion and PORTfolio
differ?  Do they both utilize similar platforms?  May they be used
in
conjunction with each other?  Also, elaborate on the function of
your
RIO product.  How does it "support the activities of spas, health
clubs and resorts?"  How does it tie together all areas of a
resort
property
8. You disclose that Medallion can accommodate both single and
double-byte languages.  Please revise to explain the terms single
and
double byte languages and disclose why this enables the product to
be
sold in global markets.
9. We refer you to your discussion in your MD&A of third party
software and hardware revenue.  Please revise to clarify the
extent
to which you provide the hardware that is required to run your
software.  Also, describe your relationships with third party
software companies that provide software that is imbedded within
your
products.  Do you have contracts with any of these companies?
Further, supplementally confirm that you are not substantially
dependent upon third party software.
   Competition, page 19
10. You disclose elsewhere that SAP is the largest enterprise
application software company in the world.  However, SAP is not
discussed in this section.  For example, your disclosure states
that
the ERP market is characterized by a number of smaller companies,
none of which has a significant portion of the market.  Please
revise
or supplementally advise.
Item 2.  Financial Information, page 22
Management`s Discussion and Analysis of Financial Conditions and
Results of Operations, page 22

General
11. We refer you to the disclosure elsewhere in the filing that
you
have discovered in the past and may in the future discover areas
of
your internal controls that need improvement and that you devoted
significant resources in 2004 to improve your internal controls.
In
light of this disclosure, advise why the expenditure of resources
is
not addressed in this section.  Please consider expanding your
disclosure to explain the areas of your internal controls that
needed
improvement and the steps you have taken to improve your internal
controls.  Who identified the areas needing improvement and when
did
this occur?  Indicate when these issues were identified and
resolved
and whether your auditors considered them "material weaknesses."
To
the extent that your auditors discovered "reportable conditions"
not
rising to the level of "material weaknesses," supplementally
advise.
Will further steps be necessary to determine that your controls
and
procedures are effective?  Are there material capital expenditures
associated with addressing the effectiveness of your controls and
procedures in the future?  Also, consider addressing the
consequences
if your controls and procedures are not effective once you begin
filing reports under Section 13 of the Exchange Act.  Are there
additional ramifications, other than the potential loss of
confidence
by investors as discussed on page 6?

Critical Accounting Policies and Estimates, page 23
12. Consider adding disclosure regarding estimates made in
connection
with your restructuring activities to your Critical Accounting
Policies and Estimates. We note that the adjustments made to
previously recorded lease accruals had a material affect on your
2004
results.
13. Expand your description of critical accounting policies and
estimates to include, to the extent material, the sensitivity of
estimates to deviations of actual results from management`s
assumptions and circumstances that have resulted in revised
assumptions in the past or from other outcomes that are reasonably
likely to occur. You should address such factors as how accurate
the
estimate/assumption has been in the past, how much the
estimate/assumption has changed in the past, and whether the
estimate/assumption is reasonably likely to change in the future.
For example, you have significantly revised key estimates related
to
a large development contract, but your disclosures are very brief
and
do not appear to indicate that this has occurred in the past or
whether future changes are reasonably likely.  In addition, you
record a general allowance for uncollectible accounts receivable
by
applying a percentage to the aging of your receivables, but your
disclosure does not indicate whether this percentage was changed
in
the past or how sensitive your results are to such changes. See
SEC
Release Nos. 33-8350 and 34-48960 and FR-72 and revise your
disclosure related to each policy and estimate accordingly.
14. Your disclosure suggests that revenue deferrals may have
resulted
from unsuccessful attempts to "document [y]our sales with
contracts
or purchase orders that attempt to make clear that the purchase of
software license is not contingent or conditioned on the delivery
of
another element, such as customer support." Supplementally,
clarify
this disclosure and indicate the extent to which your attempts
have
failed resulting in revenue deferrals. In cases that resulted in
deferrals, explain how you failed to document the arrangements and
why these failures resulted in deferrals.  In addition, indicate
how
your revenue recognition policy on page F-12 addresses these
issues.

Results of Operations, page 25

    General
15. Although the disclosure of your results of operations explains
changes from period to period, in certain instances, you refer to
two
or more factors that contributed to a material change that you
discuss.  When changes are due to multiple factors, you should
disclose the dollar amount of the change that was attributable to
each significant factor you identify and explain the events that
led
to the change in such factor.  This information is especially
important when the overall change you are describing is the result
of
offsetting contributing factors.  See Section III.D of SEC Release
34-6835.  For example, but without limitation, we note that you
disclose on page 33 that following your restructuring initiative,
SG&A costs were reduced substantially as certain accounting
operations were consolidated, headcount reduced, excess office
space
abandoned and other cost reduction efforts were implemented to
reduce
overall expense levels.  Please revise your disclosure to quantify
material changes attributable to each factor.

	Overview, page 25
16. We note your discussion of activities and losses related to
significant custom software development contract in 2002 and 2003.
This discussion indicates that, in 2002, you recorded an accrual
to
fully reserve for the then estimated loss on the contract.  This
discussion further indicates that activity during the nine months
ended September 30, 2003 resulted in an additional loss of $1.5
million.  Supplementally, clarify how the timing and amount of the
additional loss was determined.  Was an additional loss accrual
recorded during the period?  Also, clarify the specific factors or
conditions that resulted in an additional loss beyond the amount
recorded during 2002.
17. Discussion in this section regarding the 2003 restructuring
actions describes various factors and conditions that "required
more
resources than you had available."  In view of this, expand your
discussion of the restructuring activities to clearly describe how
the actions taken are expected to address your lack of sufficient
resources.  In this regard, describe the strategy behind your
restructuring actions.  Additionally, disclose and quantify the
expected effects on future earnings and cash flows resulting from
your restructuring plans.  See SAB Topic 5:P.4.
	Period Comparisons - 2004 Compared to 2003, page 26

	Total Cost of Revenue, page 30
18. We note your discussion of a charge recorded during 2003
related
to the impairment of purchased and developed software in the
hospitality group.  Revise this discussion to describe the
software
involved and the factors that led you to conclude that the
software
was impaired.  Explain how the amount of the impairment was
determined.  Indicate the current status of the software.
Cost of Maintenance, page 31
19. You disclose that the India support center for manufacturing
products became fully operational in late 2004 and the hospitality
support center will contribute to your cost controlling efforts in
fiscal 2005.  In future filings, please continue to disclose the
impact of these support centers on your results of operations and
your cost controlling efforts, including period to period
comparisons, as applicable.  To the extent that these support
centers
will continue to lower your costs, provide disclosure as to known
trends that you reasonably expect will have a materially favorable
impact on your results of operations.

   Restructuring Related Charges, page 34
20. We note that you realigned your operating structure during the
year ended September 30, 2004 and for the nine months ended
September
30, 2003.  Please revise to describe the expected results from
your
restructuring activities (reduced depreciation, reduced lease
costs,
reduced employee costs, etc.) and the
extent to which you have realized the effects, or otherwise, when
you
intend to realize these effects.  Also, if the restructuring
program
is likely to cause SG&A to remain lower than in 2005, please
disclose.

		Discontinued Operations, page 44
21. We note your discussion of additional charges recorded during
2004 for additional obligations of the discontinued operations.
Expand this discussion to describe the nature and causes of the
obligations.  Also, indicate your assessment of the probability of
additional material charges in future periods.  Explain the basis
for
your assessment of this probability.  In addition, disclose the
extent of your ongoing responsibilities for funding expenses
incurred
by the trust.
Liquidity and Capital Resources, page 44
22. We note that pursuant to the Senior Subordinated Note and
Warrant
Purchase agreement with Capital Resource Partners that you are
subject to various covenants and restrictions.  Please revise to
disclose the amended material covenants and restrictions that you
must comply with under your debt instruments and discuss the
waivers
that were required for you stay in compliance.  Also, elaborate on
the limitations on additional indebtedness resulting from your
relationship with Capital Resources Partners, in light of your
disclosure that you may need additional capital.
23. We note that you report a substantial working capital deficit
as
of your most recent year end.  Given this, expand your disclosures
to
explain the basis for your belief that you will have adequate
resources to meet your commitments and cash requirement for at
least
the next twelve months.  Address why you believe that cash flows
will
improve in 2005 by discussing the specific factors that you
believe
will contribute to these improvements. Clarify the phrase "over
time"
as it relates to the expected restructuring improvements.  Clearly
describe your plans to address liquidity concerns in the event
that
these improvements do not materialize as expected.
Item 3.  Properties
24. In light of the fact that you have only filed the lease
agreement
for the property located at Two Meridian Crossings, it appears
that
you have concluded that the Fourth Shift House lease agreement is
not
material.  Supplementally advise of the basis for you belief or
file
the lease agreement as exhibits.  See Item 601(b)(10)(ii)(D) of
Regulation S-K.
Item 4.  Security Ownership of Certain Beneficial Owners and
Management,      page 50
25. We note that footnote 1 discloses that the table "[d]oes not
include options to purchase common stock that are not currently
exercisable, but will become exercisable upon the effective date
of
this Form 10."  Please revise your table to include all
outstanding
securities deemed t