Katapult Holdings, Inc. disclosed in a regulatory filing on July 27, 2026, that it is facing litigation and stockholder demands related to its pending merger with Aaron's Intermediate Holdco, Inc. and CCF Holdings LLC. The company stated it is providing additional disclosures to its proxy statement to address the allegations, though it denies any wrongdoing.
Merger Background
Katapult entered into a merger agreement on December 11, 2025, with an amendment following on June 17, 2026. The complex transaction involves multiple steps, including exchanges of management incentive plan units and the merger of two acquisition subsidiaries with Aaron's and CCFI. The combined company would bring together Katapult's lease-to-own platform with Aaron's and CCFI's operations. Katapult filed a registration statement and proxy statement with the SEC, and a special meeting of stockholders to vote on the mergers is scheduled for August 6, 2026.
Lawsuits and Demand Letters
The filing reveals that two complaints were filed in the Supreme Court of the State of New York on July 15 and July 16, 2026. The plaintiffs, Michael Clark and Nathan Turner, are each described as purported Katapult stockholders suing in an individual capacity. The complaints allege negligent misrepresentation, concealment, and negligence under New York State common law, asserting that the proxy statement omitted material information and was therefore incomplete or misleading. The plaintiffs seek either to enjoin the defendants from consummating the merger until corrective disclosures are made, or to recover damages if the merger closes.
In addition to the lawsuits, Katapult received demand letters from other purported stockholders. These letters make similar allegations about disclosure deficiencies, though they frame their claims under U.S. federal securities laws rather than New York common law. The demands also seek corrective disclosures before the special meeting.
Katapult's Response and Supplemental Disclosures
Katapult and the other named defendants deny violating any laws and maintain that the claims are without merit and that the proxy statement complies fully with applicable law. Nevertheless, the company elected to voluntarily issue supplemental disclosures. The filing states this decision was made to reduce the risk of the litigation delaying or jeopardizing the merger, to minimize the costs and uncertainties of litigation, and to correct certain previously reported information about beneficial ownership following the merger. Katapult explicitly stated that nothing in the filing should be deemed an admission that any further disclosure was legally required.
The supplemental disclosures add detail in several areas. They clarify that confidentiality agreements with other potential transaction counterparties included a standstill provision with a "don't ask, don't waive" clause that would fall away upon entry into a definitive merger agreement. The filing also provides expanded explanations of the discount rate methodologies used by Guggenheim Securities in its financial analyses for both Katapult and the Aaron's/CCFI combined entity. For Katapult's discounted cash flow analysis, the filing now explains that Guggenheim used a two-stage methodology, with a distressed-company cost of capital through 2030 and a normalized terminal cost of capital thereafter. Additional detail was provided on the perpetual growth rate assumptions and the inputs for the capital asset pricing model used in the Aaron's/CCFI analysis. The filing also updates a comparison table of selected publicly traded companies and revises the projected post-merger beneficial ownership table and related footnotes.
Katapult cautioned that additional lawsuits or demands could still be filed, and it will not necessarily announce them if they occur.