AMERICAN REALTY INVESTORS INC 10-K

ITEM 3. LEGAL PROCEEDINGS We had been engaged in litigation with David Clapper and entities related to Mr. Clapper (collectively, “Clapper") since 1999. The matter originally involved a transaction in 1998 in which we were to acquire eight multifamily properties from the Clapper. Through the years, several rulings, both for and against us, were issued with a range of settlement from zero to $148.0 million . On October 31, 2024, we executed a Settlement Agreement and General Release (the “Settlement Agreement”) and paid $23.4 million to resolve all claims. On November 8, 2024, the court dismissed the case with prejudice. We are defendants in litigation related to a property sale ("Nixdorf") that was completed in 2008, which was tried to a jury in March 2023. On March 18, 2023, the jury in the case returned a “Plaintiff take nothing” verdict in our favor. On January 7, 2025, the Fifth District Court of Appeals at Dallas reversed the trial court's judgement and remanded the case to the trial court. We intend to challenge the ruling by writ of mandamus. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 14 PART II