DENVER, Feb. 22, 2018 /PRNewswire/ -- The Board of
Directors (the "Board") of RE/MAX Holdings, Inc. (the
"Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of
RE/MAX, one of the world's leading franchisors of real estate
brokerage services, and Motto Mortgage, an innovative mortgage
brokerage franchise, today announced the conclusion of the
previously disclosed internal investigation by a Special Committee
chartered by its independent directors and consisting solely of
independent directors.
With the assistance of external counsel, the Special Committee
conducted a complete and independent investigation. The Special
Committee's investigation did not identify any matters requiring
adjustments to the Company's previously issued financial
statements.
The investigation addressed previously undisclosed transactions
involving a loan of personal funds from then CEO David Liniger to then COO Adam Contos as well as certain other personal
transactions, including cash and non-cash gifts, from David and Gail Liniger to Contos and
others.
Dick Covey, the Company's Lead
Independent Director, noted, "Although the loan, gifts, and other
transactions between the Linigers and Adam
Contos did not involve use of any corporate funds, the
Special Committee concluded that these transactions created an
actual or apparent conflict of interest. This, and the
non-disclosure of these personal transactions to the Company,
violated Company policies. The Board accepts that this
nondisclosure was unintentional, and Adam has committed to repay
the loan as promptly as possible."
The Special Committee also identified instances of noncompliance
with other Company policies related to workplace conduct, which
were limited to Liniger's actions and did not extend to other
members of the Company's leadership team.
As previously reported, after founding, and leading the company
for 45 years, Liniger completed the transition out of his position
as Co-CEO of RE/MAX on February 14,
2018. Contos was appointed as Co-CEO in May 2017 as part of the Board's planned
leadership succession process and now serves as sole CEO of RE/MAX
Holdings. Covey said, "The Board looks forward to working with Adam
and his senior leadership team to continue to build on RE/MAX's
strong foundation and lead RE/MAX into its next chapter."
Liniger will continue to serve on the Board in the role of
non-executive Chairman and provide his insights and experience on
the real estate industry and the Company's business. The
Board has also broadened the scope of Covey's responsibilities as
Lead Independent Director.
As a result of the Investigation, the Board and Senior
Leadership will implement remedial measures in the weeks and months
ahead. These include enhanced corporate policies and
practices related to gifts, loans, conflicts of interest and
workplace conduct, and the reporting of such matters, and enhanced
training on the responsibilities of officers and leaders related to
these items.
About the RE/MAX Network
RE/MAX was founded in 1973 by David and
Gail Liniger, with an innovative, entrepreneurial culture
affording its agents and franchisees the flexibility to operate
their businesses with great independence. Over 115,000 agents
provide RE/MAX a global reach of over 100 countries and
territories. Nobody sells more real estate than RE/MAX as measured
by total residential transaction sides.
RE/MAX, one of the world's leading franchisors of real estate
brokerage services, and Motto Mortgage, an innovative mortgage
brokerage franchise, are subsidiaries of RMCO LLC, which is
controlled and managed by RE/MAX Holdings, Inc. (NYSE: RMAX).
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are often identified by the use of words such as
"believe," "intend," "expect," "estimate," "plan," "outlook,"
"project," "anticipate," "may," "will," "would" and other similar
words and expressions that predict or indicate future events or
trends that are not statements of historical matters.
Forward-looking statements include statements related to the
implications of the Special Committee investigation and its impact
on the Company and its operations, the Company's remedial efforts
and other measures in response to the outcome and findings of the
Special Committee investigation, the Company's Board and management
structure, including statements related to the roles of
Adam Contos and the senior
management team, the roles of Dave
Liniger and of Richard Covey
and the independent members of the Board, statements regarding the
impact of the findings of the special committee investigation on
the Company's historical financial statements as well as the
Company's strategic and operational plans and business models.
Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily accurately
indicate the times at which such performance or results may be
achieved. Forward-looking statements are based on information
available at the time those statements are made and/or management's
good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. Such risks and
uncertainties include, without limitation: (1) the impact of the
findings and recommendations of the Special Committee on the
Company and its management and operations, (2) that while the
Independent Committee investigation has been completed, the full
implications of the investigation on the Company and its operations
are still being evaluated and there may be unanticipated adverse or
negative effects that are not identified at this time, including
reputational damage to the Company as well as the time and expense
incurred in implementing the recommendations of the Special
Committee, (3) any legal proceedings or governmental or regulatory
investigations or actions directly or indirectly related to the
underlying matters of the Special Committee's internal
investigation or other matters may result in adverse findings, the
imposition of fines or other penalties, increased costs and
expenses, and the diversion of management's time and resources to
address such matters, any of which may have a material adverse
effect on the Company, (4) the impact of recent changes to the
Company's senior management team, (5) the impact of disclosing
previously undisclosed transactions between members of our
management team, including a loan from David Liniger to Adam
Contos, (6) the existence and identification of control
deficiencies, including disclosure controls or internal
controls over financial reporting, and any impact of such control
deficiencies as well as the associated costs in remediating those
control deficiencies, (7) changes in business and economic activity
in general, (8) changes in the real estate market or interest rates
and availability of financing, (9) the Company's ability to attract
and retain quality franchisees, (10) the Company's franchisees'
ability to recruit and retain real estate agents and mortgage loan
originators, (11) changes in laws and regulations, (12) the
Company's ability to enhance, market, and protect the RE/MAX and
Motto Mortgage brands, (13) fluctuations in foreign currency
exchange rates, (14) the Company's preliminary financial results
for the third and fourth quarters of 2017 and full-year 2017 are
subject to change and may be subject to revision or change,
and (15) the impact of the Tax Cut and Jobs Act, as well as
those risks and uncertainties described in the sections entitled
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission ("SEC") and similar disclosures in subsequent periodic
and current reports filed with the SEC, which are available on the
investor relations page of the Company's website at www.remax.com
and on the SEC website at www.sec.gov. Readers are cautioned
not to place undue reliance on forward-looking statements, which
speak only as of the date on which they are made. Except as
required by law, the Company does not intend, and undertakes no
obligation, to update this information to reflect future events or
circumstances.
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SOURCE RE/MAX Holdings, Inc.