Two Harbors Investment Corp. is embroiled in ongoing litigation with PRCM Advisers LLC and its affiliates, Pine River Domestic Management L.P. and Pine River Capital Management L.P. The dispute arose after Two Harbors terminated its management agreement with PRCM Advisers in July 2020, citing material breaches and gross negligence. PRCM Advisers responded by filing a complaint alleging misappropriation of trade secrets, breach of contract, and other claims. Recently, the court ruled against Two Harbors' motion for summary judgment and partially granted the plaintiffs' motion, finding that Two Harbors did not have sufficient grounds to terminate the agreement for cause. As a result, Two Harbors expects to record a contingency liability of $198.9 million, which includes a termination fee and accrued interest. The company's counterclaims were dismissed, and the litigation continues to unfold.