UWM Holdings Corp. v. Two Harbors Investment Corp. (Failed $1.3B Merger Fraud & Breach Suit)
UWM Holdings Corp. and UWM Acquisitions 1 LLC sued NYSE-listed mortgage REIT Two Harbors Investment Corp. on August 10, alleging Two Harbors' board and management willfully breached and committed fraud in connection with their December 2025 stock-for-stock merger agreement by sabotaging the March 16, 2026 shareholder vote and steering the company toward a competing all-cash offer from CrossCountry Mortgage. UWM alleges Two Harbors misrepresented its retail shareholder base, delayed producing a beneficial-owner list needed for solicitation, and violated the deal's nonsolicitation provision, while executives stood to receive cash payouts under the rival bid rather than stock. Two Harbors has called the suit frivolous.
Why it matters
Tests whether a target REIT's conduct during proxy solicitation — not just its ultimate decision to accept a rival bid — can be recast as willful breach or fraud that escapes a negotiated termination-fee cap, a theory with direct application to any public real estate entity's stock-for-stock merger agreement. REIT boards and general counsel should treat proxy-outreach mechanics and documented good-faith engagement with rival bidders as independent litigation risk, not administrative detail, in any contested M&A process.
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