Two Harbors Faces Shareholder Lawsuit Over Proposed Uwm Deal

A shareholder is suing Two Harbors Investment Corp. and members of its board over alleged potential violations of the Securities Exchange Act of 1934 tied to the company’s proposed acquisition by UWM Holdings Corp.

Shareholder Michael Koblentz claims that Two Harbors submitted “materially incomplete and misleading” information about the transaction’s financial impact in filings with the U.S. Securities and Exchange Commission (SEC). He also alleges company executives may have traded shares around the deal’s announcement to “maximize their profits.”

The lawsuit — which names chairman Stephen Kasnet and president and CEO William Greenberg as defendants — was filed Feb. 4 in federal court in Illinois.

A spokesperson for Two Harbors told HousingWire that the company had no comment. A UWM spokesperson did not immediately respond to a request for comment. National Mortgage News first reported the case.

On Dec. 17, UWM announced a $1.3 billion agreement to acquire Two Harbors, a transaction that would create the nation’s eighth-largest mortgage servicer. Real estate investment trust Two Harbors, which focuses on mortgage servicing rights (MSRs), is also a leading servicer of conventional loans through its RoundPoint Mortgage Servicing platform.

The complaint alleges the company failed to disclose in its registration statement the identity of an unnamed financial adviser engaged in December 2024 and early 2025, along with any related fees. It also claims Two Harbors did not specify the services tied to $2.5 million in fees paid to Houlihan Lokey, which allegedly omitted projections and implied valuation assumptions in its fairness analysis of the deal.

The lawsuit further alleges that Greenberg and four other senior executives exercised stock options and made non-open-market stock purchases on both Dec. 17, the day the transaction was announced, and Dec. 18, before selling shares the following day. 

It’s possible that the timing of the merger agreement and announced proposed transaction may have been influenced by the executives’ desire to “maximize their profits,” the complaint states.

Timeline details

According to the filing, Two Harbors received two unsolicited acquisition proposals in December 2024 — one from UWM and another from “Company A.” The board in January 2025 deemed the latter offer insufficient after meeting with an undisclosed financial adviser and legal counsel, while UWM increased its offer but was rejected. 

In February 2025, Two Harbors engaged Houlihan Lokey for assistance. The following month, the company sent UWM a nonbinding term sheet featuring a cash-election merger structure to continue negotiations.

In September 2025, another bidder, “Company B,” proposed a stock-for-stock transaction. Meanwhile, negotiations heated up and Houlihan Lokey contacted four potential counterparties, including UWM and “Company C,” to gauge interest in a strategic transaction. 

“Company B” withdrew and “Company C” was viewed as less certain due to timing concerns and downward valuation adjustments. In December, Two Harbors determined UWM’s proposal was superior and entered a limited-term exclusivity agreement.

Under the agreement, Two Harbors shareholders would receive 2.3328 shares of UWMC Class A common stock for each share they own. The deal also includes a $25.4 million termination fee if the transaction is not completed — a provision the complaint characterizes as an “onerous and preclusive deal protection device.”