Zillow agreed to pay $212.5 million in cash to settle a class action lawsuit accusing the company of misleading shareholders about its failed Zillow Offers home-flipping venture. The Seattle-based online real estate marketplace did not admit wrongdoing as part of the agreement, which still requires judicial approval. The settlement comes over three weeks after the US Supreme Court declined to hear Zillow's appeal regarding a lower court ruling that allowed the case to proceed.
The legal dispute stems from a 32% stock price plunge in November 2021, which occurred after shareholders alleged company leaders painted an overly positive picture of Zillow Offers. Lawyers for the shareholders argued investors were defrauded into buying shares at inflated prices. Zillow's lawyers denied accusations of securities fraud.
The company stated insurance would cover approximately $48 million of the payout, with portions allocated to pay shareholders' legal fees. Steve Berman, representing the shareholders, characterized the settlement as the largest in the federal court district encompassing Seattle, where the case was filed.
Source: Hacker News · Summarized by HeadlinesBriefing