Company: MMI
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001628280-25-050707
Chunk: 3

Company: Marcus & Millichap, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 3
Chunk 3
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 who attempted to or in fact financed, purchased or sold properties that we or they brokered, managed or had some other involvement. We have and, in the future, could become subject to claims by those who either wished to participate or did participate in real estate transactions alleging that we did not fulfill our regulatory, contractual or other legal obligations. We also face potential conflicts of interest claims when we represent both the buyer and the seller in a transaction.

We depend on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain clients. As a result, allegations by private litigants or regulators, whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us or our investment activities, whether or not valid, may harm our reputation and damage our business prospects. In addition, if any lawsuits were brought against us and resulted in a finding of substantial legal liability, it could materially, adversely affect our business, financial condition or results of operations or cause significant reputational harm to us, which could materially impact our business.

For example, on October 1, 2025, a jury in Boone County, Missouri returned a verdict against our subsidiary, Marcus & Millichap Real Estate Investment Services, Inc., in connection with the 2019 sale of a student-housing property near the University of Missouri. The jury awarded the purchaser of the property $4.075 million in actual damages and $20.0 million in punitive damages and awarded another party $10.0 million in punitive damages with $0 in actual damages. On October 24, 2025, the judge entered judgments in the above amounts in favor of the purchaser and the other party. We deny wrongdoing and believe the verdict was rendered in error and contrary to Missouri law. The judgments are subject to post-trial motions and appeal. A hearing has been scheduled for January 6, 2026 to consider post-trial motions.

Management has estimated a range of possible loss from $0 to approximately $34.1 million, exclusive of any pre-judgment interest or costs. We recorded an accrual of $4.0 million, representing approximately the actual damages awarded. If our post-trial motions or appeals are not successful in reversing or significantly reducing the awards, we could be required to record significant additional charges, which could have a material impact on our financial results.

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In the event of a substantial loss, our commercial insurance coverage and/or self-insurance reserve levels might not be sufficient to pay the