Legal Battle Erupts Over Rocket’s Acquisition of Redfin
A legal battle is brewing over Rocket’s acquisition of Redfin, with accusations flying against both companies and their board of directors. The lawsuit, filed by Morano, alleges violations of federal securities law and Delaware fiduciary duty statutes in the negotiation of the acquisition.
The complaint specifically calls out the omission and misrepresentation of material facts in the proxy statement filed with the Securities and Exchange Commission (SEC) to sway shareholders in favor of the acquisition. The conflict of interest involving Goldman Sachs, Redfin’s financial adviser with ties to Rocket, is a focal point of the allegations.
Redfin shareholders are scheduled to vote on the merger soon, but the complaint raises concerns about the lack of disclosure regarding potential conflicts of interest. The lawsuit warns of potential damages if the issues are not addressed before the merger is finalized.
The deal between Rocket and Redfin, expected to close in the second or third quarter of 2025, involves a significant equity payment of $1.75 billion from Rocket to acquire Redfin. Both companies have yet to respond to requests for comment on the legal proceedings.