Key facts
- Zillow executives and directors are defendants in a shareholder lawsuit filed in King County Superior Court.
- The suit alleges Zillow paid Redfin $100 million to exit the multifamily rental advertising market.
- The plaintiff claims company leaders made misleading statements about the deal, calling it a 'partnership'.
- Several defendants allegedly sold Zillow stock totaling over $81 million prior to public disclosure of antitrust risks.
- Richard Barton, Lloyd Frink, and Jeremy Wacksman are accused of significant stock sales.
- The lawsuit seeks damages from defendants and corporate governance changes for Zillow.
Zillow executives and directors are facing a shareholder lawsuit alleging breaches of fiduciary duty and misleading statements regarding the company's $100 million multifamily rental syndication deal with Redfin. The suit, filed by shareholder plaintiff Shauna Binette Roth IRA in King County Superior Court in Washington, is a derivative action seeking relief for Zillow itself.
The complaint mirrors the Federal Trade Commission's (FTC) earlier allegations, stating that Zillow effectively paid Redfin $100 million to abandon its multifamily rental advertising business. The plaintiff argues that Zillow's leadership and directors should have recognized the antitrust risks associated with the deal before approving it, and that statements describing the arrangement as a "partnership" were misleading.
Furthermore, the lawsuit alleges that defendants knew about the antitrust risks before they became public and subsequently sold off more than $81 million worth of Zillow stock. Specifically, co-founder Lloyd Frink is accused of selling $33.9 million, co-founder Richard Barton $29.8 million, and CEO Jeremy Wacksman $7.2 million. The plaintiff points to the timing of these sales as suspicious, given that several defendants had historically made few discretionary open-market sales.
Zillow's Class C stock reportedly fell from $77.05 on September 30, 2025, after the FTC lawsuit was announced, to $32.19 by July 10, 2026. While the FTC suit was settled in late August without fines or damages for Zillow, the shareholder suit claims Zillow's leadership breached their fiduciary duty, wasted corporate assets, and engaged in insider trading. The plaintiff is seeking damages and corporate governance changes, including stronger internal controls and a shareholder vote on separating the CEO and chairman positions.
A Zillow spokesperson told HousingWire that the partnership with Redfin is "pro-competitive and pro-consumer" and that the FTC settlement allows the company to focus on innovation for renters and property managers.