Company: CIMO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001628280-25-006426
Chunk: 419

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 15
Chunk 419
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413,298)$(18,817)$(2,432,115)$3,539,416 $11,566 $1,118,867 (1) Included in other assets

16. Commitments and Contingencies

From time to time, the Company may become involved in various claims and legal actions arising in the ordinary course of business. In connection with certain securitization transactions engaged in by the Company, it has the obligation under certain circumstances to repurchase assets from the VIE upon breach of certain representations and warranties. 

17. Business Combination 

On December 2, 2024 (the “Acquisition Date”), the Company acquired all issued and outstanding equity interests (the “Acquisition”) of The Palisades Group, LLC, Palisades Advisory Services, LLC, and Palisades Technology Holdings, LLC, pursuant to the terms of the Equity Interest Purchase Agreement dated October 16, 2024 (the “Agreement”).  Palisades is an alternative asset manager in the global residential credit market, actively managing residential loans and real estate-related assets. The Acquisition met the requirements to be considered a business combination under ASC 805. As such, the Acquisition was accounted for using the acquisition method of accounting. The Company, via two of its wholly owned subsidiaries, was considered the acquirer of Palisades for accounting purposes. Palisades’ assets and liabilities, affected for adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s consolidated financial statements from the Acquisition Date.The purchase price was allocated to the tangible and identifiable intangible assets based on their estimated fair market values at the Acquisition Date as required under ASC 805. The excess of the fair value of the net identifiable assets over the purchase price was recorded as goodwill.The fair value of the aggregate consideration transferred was $46 million. Total purchase consideration consisted of $30 million in cash paid which incorporates a $261 thousand closing true-up recognized in the measurement period in accordance with the Agreement and $16 million of contingent consideration. The maximum amount of contingent consideration to be transferred through the earnout is $20 million, per the Agreement. The fair value of the contingent consideration was determined using the Monte Carlo simulation method and is considered to be a Level 3 Liability.

134

The Company incurred approximately $5 million of acquisition-related expenses recognized in transaction expense in the Consolidated Statement of Operations. The following table sets forth the acquisition date fair value of