Two Harbors Investment (TWO) Proxy filing summary

Executive summary

• A class action was filed challenging the proxy materials for a proposed all-cash acquisition by CrossCountry, alleging misleading disclosures and breach of fiduciary duty by the board and management.

• The board is accused of favoring a lower-priced bid from CrossCountry over a higher, fully financed offer from UWMC, allegedly to secure immediate cash payouts and continued roles for management.

• The complaint details repeated postponements of the shareholder vote and claims the board engineered a termination fee structure to disadvantage UWMC specifically.

• Plaintiffs seek corrective disclosures, damages, and potentially rescission if the merger is consummated, but do not currently seek to enjoin the vote.

• Both ISS and Glass Lewis recommended against the CrossCountry merger, citing lack of board engagement with UWMC and concerns over the process.

Voting matters and shareholder proposals

• Shareholders are being asked to approve the CrossCountry merger at $12.00 per share, despite a competing $12.50 per share offer from UWMC.

• The proxy materials are alleged to omit material facts about the board's process and management's interests, impacting the ability of shareholders to make an informed vote.

• The vote has been postponed multiple times, now scheduled for June 23, 2026.

Board of directors and corporate governance

• The board is alleged to have acted in self-interest, favoring a deal that benefits management over maximizing shareholder value.

• The board is accused of failing to negotiate with UWMC and of structuring deal protections to deter higher bids.

• An ad hoc committee oversaw the strategic process, but the process is criticized as neither thorough nor evenhanded.