Major shareholders are RE Colorado -of Denver Metro Association of Realtors (DMAR) and South Metro Denver Association of Realtors (SMDRA) — The company announced that it has dismissed its current officers and sold its shares to a new company called MAZL, LLC, represented by J. Burks.
In a statement released Friday by DMAR and SMDRA, officials from both companies “have signed and filed a joint, unanimous resolution to remove all REcolorado officers from their positions and duties, effective immediately. This decision and action was taken as a result of violations of confidentiality agreements signed by the board of directors.”
REcolorado is a multiple listing service (MLS) with 26,000 members. The company’s board and management were surprised last week to receive a letter of intent from DMAR and SMDRA, who had been in negotiations since February to acquire the MLS, to sell to MAZL. Some REcolorado members publicly announced the sale on Monday, which appears to have prompted today’s action. Four of REcolorado’s 11 board members have resigned in the past few days in protest of the actions of other board members, according to statements from DMAR and SMDRA.
A statement from DMAR and SMDRA board members explained their reasons for firing the seven remaining board members: “While unfortunate, we have reached this decision based on significant breaches of confidentiality and signed Non-Disclosure Agreements (NDAs) by representatives of the REcolorado board of directors. This, combined with the actions of the REcolorado board over the past few days, has led us to this decision, which we believe is in the best interest of our collective membership, long-term ownership and operational goals.”
The statement also included comments from the four resigning directors, who were not identified. One commenter said, “Management has forgotten that shareholders own the company and have the right to decide the final course of action.” Others noted that they supported shareholders and their actions.
DMAR and SMDRA confirmed the sale in a statement Tuesday night and sought to reassure members: “We have completed our shareholder due diligence and are confident in the letter of intent. The proposed buyer is committed to operating the MLS service for our professional broker community for the long term, MLS resources will be used to enhance service delivery to all subscribers, and the company will not be resold.”
In a statement released Wednesday night, RE Colorado The board warned Denver-area real estate agents that outside ownership of the local MLS could bring further uncertainty, and while the statement said it supports efforts to separate the local MLS from DMAR and SMDRA, the MLS said it opposes the association selling it to an outside private equity firm.
“We disagree with their approach and are committed to maintaining REcolorado as a broker-focused business partner, and will continue to pursue all options to ensure your MLS remains a locally owned organization operated in the best interest of your firm and your customers,” the statement read.
New Buyer
According to a statement from DMAR and SMDRA today, the new buyer, Burks, has been a “real estate industry leader for over 40 years” and his company, MAZL, is a “private corporation formed for the purpose of acquiring MLS services.”
“This change in ownership does not waver from our commitment to providing a broker-centric platform,” Burks said in a statement. “I want to assure subscribers that REcolorado will continue to operate as a Multiple Listing Service and maintain its core mission of providing great data, tools and resources to real estate agents and licensees. We are committed to ensuring the MLS remains a true, trusted, broker-centric partner that our subscribers can rely on.”
The sale price and timeline for closing the transaction were not disclosed.
