Real-estate investor Nicholas Schorsch.

RCS Capital (RCAP) and American Realty Capital Properties (ARCP) said Thursday that they have settled their differences regarding the sale of certain Cole Capital assets. As a result, RCAP is set to pay its sister firm a “negotiated break-up fee” that includes a cash payment of $32.7 million and two-year promissory note worth $15.3 million.

RCAP had agreed to a $700 million deal with ARCP in late October that included Cole Capital’s private-capital management operations, as well as subadvisory agreements and wholesale arrangements related to five Cole Capital nontraded real estate investment trusts. However, after ARCP revealed accounting errors of $23 million later in the month and came under regulatory scrutiny, RCAP said the deal was over, and ARCP sued its sister firm in the Delaware Court of Chancery.

ARCP is led by co-founder and Chairman Nicholas Schorsch; Schorsch is executive chairman of RCS Capital, which includes about 9,700 affiliated independent advisors that do business under a variety of brands and are part of Cetera Financial Group.

In addition, ARCP will keep a $10 million payment made by RCS Capital associated with the first closing, and RCS Capital will no longer ask ARCP to pay $2 million for structuring services tied to ARCP’s May 2014 equity offering.

“We believe the negotiation of a fixed-cost settlement clearly outweighs the potential expense and distraction of a drawn-out litigation process, enabling us to focus on the execution of our proven business strategy,” said RCS Capital CEO Michael Weil, in a statement.

“We continue to see progress across our entire industry-leading platform, including the reinstatement of a number of selling agreements within our wholesale business,” Weil added. “We look forward to continuing to expand our high-quality, diverse suite of investment solutions designed to address the needs of our advisors and the demands of their clients.”

About a month ago, Charles Schwab (SCHW) and Fidelity said they stopped sales of products associated with Nicholas Schorsch’s real estate operations. Multiple independent broker-dealers —including Cetera Financial, along with LPL Financial (LPLA), Advisor Group, National Planning Holdings, Cambridge Investment Research and Securities America — also suspended sales of Cole and AR Capital nontraded REITs.

“They want confirmation of the independence of each company [with ties to Schorsch] and the reliability of the financial statements,” explained Realty Capital Securities CEO Bill Dwyer on an earnings call in November. “This week sales suspensions have been lifted by a number of firms. We talked with about 100 institutions. We have gotten nothing but positive feedback.”

— Check out No Talk of Cetera Spinoff, CEO Roth Says on ThinkAdvisor.