Zillow will pay $212.5 million to settle a shareholder class action lawsuit over its handling of Zillow Offers, the home-flipping business it shut down in 2021.

The lawsuit alleged that Zillow executives painted an overly positive picture of Zillow Offers in the months before the shutdown, without disclosing how poorly the company was able to predict home prices. That kept the stock artificially high until Zillow revealed the problems and announced the shutdown in November 2021, according to the complaint.

The Seattle-based company disclosed the settlement Wednesday in an SEC filing. About $48 million of the payment is expected to come from insurance. The deal requires court approval and includes no admission of wrongdoing.

In a statement, a Zillow spokesperson said, “We are pleased that the parties have reached a resolution on the matter.”

The settlement comes about three weeks after the U.S. Supreme Court declined to hear Zillow’s challenge to the case’s class status. The U.S. Chamber of Commerce and other business groups backed Zillow’s petition.

Steve Berman, managing partner of Seattle law firm Hagens Berman, the court-appointed class counsel, told Real Estate News he believes it’s the largest single securities settlement in the history of the Western District of Washington, the federal court district that includes Seattle.

Separate shareholder lawsuits filed on the company’s behalf against its leaders, known as derivative suits, remain pending, according to the filing.

Zillow bet its future on buying and selling homes in 2019, when co-founder Rich Barton returned as CEO and projected the business would reach $20 billion in annual revenue within three to five years. The company used its pricing algorithms to buy houses, fix them up and resell them.

The effort unraveled in the fall of 2021. An analyst report found that two-thirds of 650 homes it sampled from Zillow’s inventory were listed for less than the company paid.

Days later, Zillow shut down the business, cut about 2,000 jobs and took a $304 million inventory writedown, with Barton citing the unpredictability of its home-price forecasts. Zillow’s stock fell 32% over two days, according to Reuters.

The original lawsuit, filed that month in federal court in Seattle, cited upbeat statements executives made in the months before the shutdown.

They included a September 2021 remark by Jeremy Wacksman, then Zillow’s chief operating officer and now its CEO, that “the strength and the appeal for Zillow Offers just continues to grow.” Investor Jeremy Jaeger later became the lead plaintiff.

The class covers investors who bought Zillow Class A or Class C shares between Aug. 5 and Nov. 2, 2021. If the judge grants preliminary approval, Zillow will pay the money into a settlement fund within 20 business days.