Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

Ladenburg Thalmann Financial Services Inc. Prior to February 14, 2020, the Company owned 15,191,205 common shares (or approximately 10.2%) of LTS, which was a publicly-traded diversified financial services company prior to its merger with Advisor Group. The Company accounted for its investment in LTS under the equity method of accounting. In connection with the merger, in February 2020, the Company received cash proceeds of $53,169. The Company recorded equity in earnings of $53,424 for the year ended December 31, 2020. The Company also received $6,009 for the redemption of its 240,000 shares of LTS 8% Series A Cumulative Redeemable Preferred Stock.

Prior to the merger, the Company and LTS were parties to a management agreement and LTS paid the Company $103 and $850 under the agreement for 2020 and 2019, respectively; these amounts were recorded as equity income.

LTS paid cash compensation to the President and Chief Executive Officer of the Company, who served as Vice Chairman of LTS, prior to the merger, of $19 and $1,600 for 2020 and 2019, respectively. LTS paid cash compensation to the Company’s Executive Vice President and COO (the “Company’s COO”), who served as President and CEO of LTS, of $41 and $2,142 for 2020 and 2019, respectively. At the closing of the transaction, the Company’s COO resigned as Chairman, President and Chief Executive Officer of LTS, and the Company’s management agreement with LTS was terminated.

Dr. Philip Frost, who beneficially owns more than 5% of the Company’s common stock, was a director of LTS until September 2018 and was the largest shareholder of LTS until December 2018.

Castle Brands Inc. Prior to October 2019, the Company owned 12,895,017 shares (or approximately 7.6%) of Castle, which was a publicly-traded spirits company prior to its acquisition by Pernod Ricard. The Company accounted for its investment in Castle under the equity method of accounting. In connection with the acquisition, in October 2019, the Company received cash proceeds of $16,377 and recorded a pre-tax gain of $16,377.

Prior to the acquisition, the Company and Castle were parties to a management agreement and Castle paid the Company $75 in 2019 under the agreement. Castle paid retention payments of $515 in 2019 to the Company’s COO who served as President and Chief Executive Officer as well as a director of Castle until October 2019. Dr. Frost was a director of Castle and was the largest shareholder of Castle until October 2019. At the closing of the transaction, the Company’s COO resigned as President and Chief Executive Officer of Castle and the Company’s management agreement with Castle was terminated.

Insurance. The Company’s Chief Executive Officer, a firm in which he is a shareholder, and affiliates of that firm received insurance commissions aggregating approximately $241, $265 and $215 in 2021, 2020 and 2019, respectively, on various insurance policies issued for the Company and its subsidiaries.

Consulting services. Beginning in April 2020, a director of the Company, who served as President and Chief Executive Officer of Liggett Group and Liggett Vector Brands until March 2020, has served as Non-Executive Chairman of the Board of Managers of Liggett Vector Brands and as a Senior Advisor to Liggett. The director has been receiving compensation of $60 per month for his services as well as access to an office, administrative support and reimbursement of expenses reasonably incurred in connection with the services. The director received $540 in 2021.

Other. In addition, the Company had made investments in other entities where Dr. Frost has had relationships. In 2020, the Company liquidated its investments in BioCardia, Inc. (OTC: BCDA) and Cocrystal Pharma, Inc. (NASDAQ: COCP). Dr. Frost was a more than 10% shareholder of BioCardia, Inc. and a director and was a more than 5% shareholder of CoCrystal as of the date the investments were liquidated.

In September 2012, the Company entered into an office lease with an entity affiliated with Dr. Frost. The lease is for space in an office building in Miami, Florida and will expire on April 20, 2023. The Lease provides for payments of $36 per

month increasing to $41 per month. The Company recorded rental expense of $458 for the three years ended December 31, 2021, 2020 and 2019, associated with the lease.

Douglas Elliman Inc. On December 29, 2021, the Company completed the Spin-off of Douglas Elliman, which included the real estate services and PropTech investment business formerly owned by the Company through its subsidiary, New Valley.

Vector Group and Douglas Elliman entered into the Distribution Agreement and the Transition Services Agreement with respect to transition services and a number of ongoing commercial relationships. Under the Transition Services Agreement, Douglas Elliman will pay the Company $4,200 in 2022.

Following the spin-off, there is an overlap between certain officers of Vector Group and Douglas Elliman. Howard M. Lorber serves as the President and Chief Executive Officer of Vector Group and of Douglas Elliman. Richard J. Lampen serves as the Chief Operating Officer of Vector Group and of Douglas Elliman, J. Bryant Kirkland III serves as the Chief Financial Officer and Treasurer of Vector Group and of Douglas Elliman, Marc N. Bell serves as the General Counsel and Secretary of Vector Group and of Douglas Elliman, and J. David Ballard serves as Senior Vice President, Enterprise Efficiency and Chief Technology Officer of Vector Group and of Douglas Elliman. Furthermore, immediately following the spin-off, three of the members of our Board of Directors, Messrs. Lorber and Lampen as well as Wilson L. White, will also serve as directors of Douglas Elliman.

Douglas Elliman Realty LLC has been engaged by certain developers as the sole broker or the co-broker for several of the real estate development projects that New Valley owns an interest in through its real estate venture investments. Douglas Elliman had gross commissions of approximately $8,956, $10,783 and $18,952 from these projects for the years ended December 31, 2021, 2020 and 2019, respectively.

A son of the Company’s President and Chief Executive Officer is an associate broker with Douglas Elliman and he received commissions and other payments of $925, $870 and $712, respectively, in accordance with brokerage activities in 2021, 2020 and 2019, respectively.