Two Harbors Investment to pay $375M to settle Pine River litigation

[House models and one with REIT real estate investment trust.]
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Two Harbors Investment (NYSE:TWO [https://seekingalpha.com/symbol/TWO]) agreed to pay $375M in cash [https://seekingalpha.com/pr/20207225-two-provides-business-update]to settle all litigation related to terminating its management agreement with PRCM Advisers LLC, Pine River Capital Management LP, and Pine River Domestic Management LP, the mortgage REIT said on Wednesday.

Two Harbors stock (NYSE:TWO [https://seekingalpha.com/symbol/TWO]) slid 3.8% in after-hours trading.

In exchange for the payment, Pine River will relinquish all ownership claims to intellectual property used by the company.

"The resolution of this matter is an important development for our company that allows us to move forward with clarity and certainty of purpose," Two Harbors (TWO [https://seekingalpha.com/symbol/TWO]) President and CEO Bill Greenberg said.

The company will fund the settlement payment through a combination of cash on hand and available borrowing, and will continue to have ample liquidity after the payment.

Two Harbors (TWO [https://seekingalpha.com/symbol/TWO]) also issued a business update that estimates its book value was ~$12.73 per common share as of Aug. 15, 2025, (before giving effect to any common stock dividend accrual, but after giving effect to preferred stock dividend accrual), compared with $12.14 as of June 30, 2205, representing a total economic return of ~4.9%.

After adjusting for the settlement payment, the company estimates its book value as of Aug. 15 at ~$11.06 per common share (before the effect of the common stock accrual but after preferred stock dividend accrual).

The company said during Q3 it signed a term sheet with a new subservicing client, seeded by the sale by Two Harbors (TWO [https://seekingalpha.com/symbol/TWO]) of ~$20B unpaid principal balance in mortgage servicing rights on a servicing-retained basis. The new relationship will increase the company's third party subservicing business to $31B UPB, or ~138,000 loans.

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* Two Harbors Q2 earnings impacted by market volatility, accrual for litigation [https://seekingalpha.com/news/4472936-two-harbors-q2-earnings-impacted-by-market-volatility-accrual-for-litigation]
* Two Harbors Investment Non-GAAP EPS of $0.28 misses by $0.08 [https://seekingalpha.com/news/4472944-two-harbors-investment-non-gaap-eps-of-0_28-misses-by-0_08]