US Supreme Court won't hear Zillow's bid to escape investor class action
ZG•The US Supreme Court declined to hear Zillow Group’s appeal of a ruling allowing a 2021 investor class action over its failed home-flipping venture to proceed. The suit followed Zillow’s November 2021 announcement that it was shutting down the division, writing down $300 million in losses and laying off 25% of its workforce.
1. Appeal rejected
The US Supreme Court declined to hear Zillow Group’s appeal of a lower court decision allowing a 2021 investor class action to proceed in federal court in Washington state. The suit accuses Zillow of misleading investors about its home-flipping venture, Zillow Offers.
2. Case moves forward
A lawyer for the plaintiffs said they looked forward to moving the case to trial. Zillow’s lawyers have denied securities fraud, saying the company disclosed the risks of entering a new line of business that did not work out as hoped.
3. Claims over disclosures
Zillow shut down Zillow Offers in November 2021 after management said it could not accurately forecast future home prices. The company reported $300 million in losses for the previous quarter and announced layoffs affecting 25% of its workforce; investors allege earlier statements by company leaders painted an overly positive picture of the business.
