| Commitments Contingencies and Guarantees [Text Block] |
16. Commitments and Contingencies
Litigation Matters
In the ordinary course of business, the Company is party to lawsuits as plaintiff or defendant involving its operations and activities. Additionally, from time to time in the ordinary course of business, the Company is involved in disputes with existing and former employees, vendors, taxing jurisdictions, and various other parties and also receives individual consumer complaints as well as complaints received through regulatory and consumer agencies. The Company takes these matters seriously and attempts to resolve any such issues as they arise.
Reserves are accrued for matters in which management believes it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. Management does not believe that the aggregate liability relating to known contingencies in excess of the aggregate amounts accrued will have a material impact on the Company’s results of operations or financial condition. However, litigation is inherently uncertain, and the actual costs of resolving legal claims, including awards of damages, may be substantially higher than the amounts accrued for these claims and may have a material adverse impact on the Company’s results of operations or financial condition.
Adverse judgments and the costs of defending or resolving legal claims may be substantial and may have a material adverse impact on the Company’s financial statements. Management is not at this time able to estimate a range of reasonably possible losses with respect to matters in which it is reasonably possible that a loss will occur. In certain matters, management is unable to estimate the loss or reasonable range of loss until additional developments provide information sufficient to support an assessment of the loss or reasonable range of loss. Frequently in these matters, the claims are broad, and the plaintiffs have not quantified or factually supported their claims.
There were no material pending legal proceedings against BBX Capital or its subsidiaries as of December 31, 2024.
Other Commitments, Contingencies, and Guarantees
BBX Capital guarantees certain obligations of its wholly-owned subsidiaries and unconsolidated real estate joint ventures, including the following:
| | ● | BBX Capital is a guarantor on a lease agreement executed by Renin which expires November 2029 with respect to base rents of $5.5 million, as well as common area costs, under the lease. |
| | ● | BBX Capital is a guarantor on certain notes payable by its wholly-owned subsidiaries. See Note 13 for additional information regarding these obligations. Although BBX Capital is not a guarantor of Renin’s TD Bank Credit Facility, if Renin does not maintain a minimum amount of excess availability as required under the terms of the facility and BBX Capital does not contribute capital to Renin in order for Renin to maintain such minimum amount, TD Bank can declare Renin in default and foreclose on the collateral for the loan. |
| | ● | As described in Note 8, Altman Living Guaranty is a consolidated VIE which provides repayment guarantees and construction completion guarantees related to the third party construction loans payable by real estate joint ventures formed by Altman Living. The repayment guarantees relate to a specified percentage of the principal balance of the construction loans and generally expire once the applicable multifamily apartment community has stabilized, while the construction completion guarantees extend over the term of the construction period, which is generally two years. The maximum amount of future payments that Altman Living Guaranty could be required to make under the repayment guarantees is $79.4 million on aggregate joint venture indebtedness of $322.7 million. Altman Living Guaranty would be required to perform on the guarantees upon a default on a construction loan by a joint venture or to ensure the completion of the construction of a multifamily apartment community. As of December 31, 2024, Altman Living Guaranty has $10.0 million in cash and cash equivalents, and such amounts are classified as restricted cash in the Company's statement of financial condition as of December 31, 2024, as Altman Living Guaranty must maintain such amounts under the terms of the applicable construction loans payable by the real estate joint ventures. As of the Acquisition Date and December 31, 2024, the Company has not recognized liabilities in its statements of financial condition for the repayment guarantees as the Company believes that the estimated fair values of these guarantees are nominal at the current time based on various factors, including the collateral value securing the loans, the status of the applicable development projects, current expectations regarding the probability of payments being made pursuant to such guarantees, and the prior history of payments made on repayments guarantees issued by Altman Living Guaranty or affiliates of Altman Living that previously provided such guarantees. In addition, in the context of the Company’s consolidated financial statements, which include the financial statements of Altman Living, the managing member of development joint ventures originated by Altman Living and Altman Living Guaranty, the construction completion guarantees reflect guarantees of Altman Living's own performance as the developer of such communities. |
| | ● | Altman Logistics established Altman Logistics Guaranty in 2023 to provide repayment, construction completion, and cost overrun guarantees related to the third party construction loans expected to be obtained by real estate joint ventures sponsored by Altman Logistics, as well as construction completion and cost overrun guarantees to the applicable real estate joint ventures. Altman Logistics has contributed $10.0 million of cash equivalents to Altman Logistics Guaranty, and this amount is included in restricted cash in the Company’s consolidated statement of financial condition as of December 31, 2024. Altman Logistics Guaranty issued guarantees to a third party lender in April 2024 in connection with the Apex Logistics Park at Delray joint venture closing on debt financing for the first phase of its development project, including a repayment guarantee, and the maximum amount of future payments that Altman Logistics Guaranty could be required to make under the repayment guarantee is $31.3 million on aggregate joint venture indebtedness of $31.3 million. Altman Logistics Guaranty would be required to perform on the guarantees upon a default on a construction loan by a joint venture or to ensure the completion of the construction of a warehouse and logistics facility. Subsequent to December 31, 2024, Altman Logistics Guaranty provided construction completion and cost overrun guarantees on construction loans obtained by joint ventures sponsored by Altman Logistics, including Apex Logistics at Lakeland, Apex Logistics Park at Davie, and Apex Logistics at Parsippany, and the maximum amount of future payments that Altman Logistics Guaranty could be required to make under its repayment guarantees related to these loans is $17.5 million on aggregate joint venture indebtedness of $69.9 million. Altman was not required to fund additional capital to Altman Logistics Guaranty, but the existing balance of $10.0 million held by Altman Living Guaranty as of December 31, 2024 is required to be maintained by pursuant to the terms of these construction loans. As of December 31, 2024, the Company had not recognized a liability in its statements of financial condition for the repayment or cost overrun guarantees related to the Apex Logistics Park at Delray joint venture’s indebtedness as the Company believes that the estimated fair value of the guaranty is nominal at the current time based on various factors, including the collateral value securing the loan, the status of the applicable development project, current expectations regarding the probability of payments being made pursuant to such guarantee, and the prior history of payments made on repayments guarantees issued by the Company, including Altman Living Guaranty and affiliates of Altman Living that previously provided such guarantees. In the context of the Company’s consolidated financial statements, which include the financial statements of Altman Logistics, the managing member of the joint ventures, and Altman Logistics Guaranty, the construction completion and cost overrun guarantees reflect guarantees of Altman Logistics’ own performance as the developer and managing member of the joint ventures. |
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