How was the U.S. Settlement Amount deposited into the U.S. Settlement Fund by Remax?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
the Nationwide Claims. By the terms of the Settlement, the Company agreed to make certain changes to its business practices and to pay a total settlement amount of $55.0 million (the "U.S. Settlement Amount") into a qualified settlement escrow fund (the "U.S. Settlement Fund"). The U.S. Settlement Amount was deposited into the U.S. Settlement Fund in three installments per the Settlement Agreement (as defined below), of which 25% (or $13.8 million) was deposited during the third quarter of 2023, 25% (or $13.8 million) was deposited during the fourth quarter of 2023 and the final 50% (or $27.5 million) was deposited during the second quarter of 2024. The Company used available cash to pay the U.S. Settlement Amount. The Company recorded the U.S. Settlement Amount to "Settlement and impairment charges" within the Consolidated Statements of Income (Loss) with a corresponding liability recorded to "Accrued liabilities" within the Consolidated Balance Sheets. Until the conclusion of the appeals process, the U.S. Settlement Amount that was paid into the U.S. Settlement Fund is included in "Restricted cash" within the Cons
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the U.S. Settlement Amount, totaling $55.0 million, was deposited into the U.S. Settlement Fund in three installments. These payments were made according to the terms of the Settlement Agreement.
The first installment, amounting to 25% of the total (or $13.8 million), was deposited during the third quarter of 2023. A second installment, also 25% (or $13.8 million), was deposited during the fourth quarter of 2023. The final installment, representing 50% of the total settlement (or $27.5 million), was deposited during the second quarter of 2024.
Remax used available cash to make these settlement payments. The company recorded the U.S. Settlement Amount as "Settlement and impairment charges" within its Consolidated Statements of Income (Loss), with a corresponding liability recorded as "Accrued liabilities" within the Consolidated Balance Sheets. The funds paid into the U.S. Settlement Fund were classified as "Restricted cash" within the Consolidated Balance Sheets until the appeals process concluded. This detailed accounting treatment provides transparency into how Remax handled the financial implications of the settlement.