8-KAcquisitions & DispositionsMaterial AgreementsSecurities & Listing+3

Rocket Companies, Inc. 8-K Report, Material Agreement (Jun 30, 2025)

Filed June 30, 2025For Securities:RKT

Summary

Rocket Companies, Inc. (RKT) has filed an 8-K report detailing the completion of its organizational and capital structure simplification, referred to as the "Up-C Collapse." This significant event effectively eliminates the company's "Up-C" structure, resolves its high-vote/low-vote stock classes, and reduces the number of common stock classes from four to two. The primary objectives of this restructuring are to create a more streamlined corporate profile and enhance the company's ability to utilize its common stock for strategic acquisitions, including the previously announced acquisitions of Redfin Corporation and Mr. Cooper Group Inc. The completion of the Up-C Collapse was a prerequisite for the closings of both the Redfin and Mr. Cooper acquisitions, which are still subject to their own customary closing conditions. This filing also outlines amendments to material agreements, most notably the Tax Receivable Agreement, which will no longer apply to exchanges occurring on or after the transaction agreement date, including the "DG Exchange." Furthermore, new agreements like an Indemnity Agreement and a Letter Agreement have been established, and certain partnership agreements have been amended or restated to reflect the new structure. Investors should note the new Class L Common Stock, its conversion rights to Class A Common Stock, and the voting power limitations designed to maintain a specific voting threshold for Class L shares.

Key Highlights

  • 1Rocket Companies, Inc. has successfully completed its organizational and capital structure simplification, the "Up-C Collapse," on June 30, 2025.
  • 2The "Up-C Collapse" eliminates the company's "Up-C" structure, high-vote/low-vote stock classes, and reduces common stock classes from four to two.
  • 3This restructuring aims to simplify the corporate profile and enhance RKT's ability to use its common stock for future acquisitions.
  • 4The completion of the "Up-C Collapse" was a condition precedent for the closing of the Redfin Corporation and Mr. Cooper Group Inc. acquisitions, which remain pending their own closing conditions.
  • 5The Tax Receivable Agreement has been amended to exclude exchanges occurring on or after the transaction agreement date, including the "DG Exchange," from generating future tax receivable payments.
  • 6A new Class L Common Stock has been introduced, with provisions for conversion into Class A Common Stock and a mechanism to limit its aggregate voting power to 79% of the total voting power under certain conditions.
  • 7New agreements, including an Indemnity Agreement and a Letter Agreement, have been entered into, and various partnership agreements have been amended to reflect the new corporate structure.

Frequently Asked Questions

The "Up-C Collapse" refers to Rocket Companies, Inc.'s completion of a significant restructuring of its organizational and capital structure on June 30, 2025. This initiative eliminated the company's "Up-C" structure, its high-vote/low-vote stock classes, and reduced the number of common stock classes from four to two. For investors, this is significant because it simplifies the company's corporate profile, making it easier to understand and potentially enhancing its ability to use its stock as currency for future acquisitions, such as the planned acquisitions of Redfin Corporation and Mr. Cooper Group Inc.

The completion of the "Up-C Collapse" was a critical condition for the closing of both the Redfin Corporation and Mr. Cooper Group Inc. acquisitions. While this organizational change has now been made, both acquisitions are still contingent upon satisfying their respective customary closing conditions before they can be finalized.

The Tax Receivable Agreement (TRA) has been amended. Specifically, Amendment No. 1 to the TRA, effective June 30, 2025, states that the TRA will not apply to any exchanges that occur, or are deemed to occur, on or after the date of the transaction agreement. This means that the "DG Exchange" and any future exchanges will not trigger payments under the TRA. Payments related to exchanges that occurred before the transaction agreement date will continue as per the original terms.

A new Class L Common Stock has been authorized as part of the restructuring. Holders of Class L shares have the option to convert their shares into Class A Common Stock at any time, and these shares will automatically convert to Class A Common Stock under certain conditions, including prior to any transfer (with limited exceptions) or upon the later of June 30, 2027, or when Class L shares no longer represent at least 79% of the total voting power. Additionally, the company's charter includes a provision that will reduce the voting power of Class L shares if their aggregate voting power exceeds 79% of the total outstanding voting power.