Former Eargo, Inc. stockholders whose shares were cashed out at $2.55 in Patient Square Capital’s February 2024 buyout would share a proposed $7 million settlement in the Delaware Court of Chancery. There is no claim form; payments would be automatic if the court approves the deal at a January 8, 2027 hearing.
What Is Happening?
Stockholders who sued over the February 2024 take-private of Eargo, Inc. have agreed to a $7,000,000 cash settlement with Patient Square Capital, L.P., Eargo’s controlling stockholder, and Justin Sabet-Peyman, a Patient Square partner who sat on Eargo’s board. The case is In re Eargo, Inc. Stockholder Litigation, C.A. No. 2024-0860-JTL, in the Delaware Court of Chancery. The parties signed an amended settlement agreement on October 12, 2026, and the court will consider final approval on January 8, 2027.The stockholders alleged that Patient Square, aided by Sabet-Peyman, squeezed out Eargo’s minority holders through a flawed process and at an unfair price, in breach of fiduciary duties. The defendants deny any wrongdoing or liability and say the merger was fair to Eargo stockholders. The settlement is not a finding that anyone did anything wrong.
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Who Is Covered?
The class is former holders of Eargo common stock, whether beneficial or of record, whose shares were exchanged for the $2.55 cash merger consideration when Patient Square acquired the shares it did not already own on February 16, 2024. Excluded are the defendants; Eargo and Patient Square directors and officers, their immediate families and affiliates; stockholders who kept equity in Eargo after the merger; and stockholders who pursued appraisal and agreed not to share in a class settlement, for those shares.The class was certified as a non-opt-out class under Delaware Court of Chancery Rules 23(a) and 23(b)(1), so class members cannot exclude themselves.
How Payments Would Work
Under the proposed plan of allocation, the net settlement fund, the $7 million minus any court-approved attorneys’ fees and expenses, notice and administration costs and taxes, is divided by the total number of eligible shares to produce a per-share recovery. Each eligible holder is paid that amount for every share held at the February 16, 2024 closing. The per-share figure has not been announced.Payments go out the same way the merger consideration did. For shares held in street name through a broker, the money goes to the broker, which deposits it into the same brokerage account. Class counsel will ask for attorneys’ fees and expenses of up to 25% of the fund, and incentive awards of up to $10,000 for each of the two plaintiffs come out of that fee award, not out of class members’ shares. Nothing is paid until the court approves the settlement and any appeals are resolved.
What Happens Next
Written objections, and notices of intention to appear at the hearing, must be received by December 28, 2026. The settlement hearing is January 8, 2027 at 1:30 p.m. Eastern in the Delaware Court of Chancery, and the court may hold it by phone or video. The objection requirements are in the notice on the official settlement website.Questions
Who is covered by the Eargo stockholder settlement?
The class is former holders of Eargo common stock, beneficial or of record, whose shares were exchanged for the $2.55 cash merger consideration when Patient Square Capital acquired the minority shares on February 16, 2024. The defendants, Eargo and Patient Square directors and officers, their families and affiliates, stockholders who kept equity in Eargo after the merger, and certain appraisal claimants are excluded.
Is there a claim form in the Eargo stockholder settlement?
There is no claim form. If the court approves the settlement, eligible former holders are paid the same way they received the merger consideration, so shares held in street name are paid into the same brokerage account.
How much will Eargo stockholders get per share?
The per-share amount has not been announced. Under the proposed plan of allocation, the net settlement fund, after attorneys’ fees and expenses of up to 25% of the fund and administration costs, is divided by the total number of eligible shares, and each holder is paid that amount for each eligible share.
Can Eargo stockholders opt out of the settlement?
The class was certified as a non-opt-out class under Delaware Court of Chancery Rules 23(a) and 23(b)(1), so class members cannot exclude themselves. They can object in writing by December 28, 2026.
Sources
• Official Eargo stockholder settlement website.• Notice of Pendency of Stockholder Class Action and Proposed Settlement, In re Eargo, Inc. Stockholder Litigation, C.A. No. 2024-0860-JTL (Del. Ch.).
• Amended Stipulation and Agreement of Settlement (October 12, 2026).
