1 week ago
Better Sues Ousted CEO Vishal Garg Over Comeback Campaign
Vishal Garg used to lead a company called Better Home & Finance.
The board removed him as CEO after the company lost a lot of money and its stock price fell.
Garg now wants to become CEO again.
He says many shareholders support him and believes he can make the company profitable.
Better says he tried to gain shareholder support in a way that broke securities rules.
The company wants a judge to pause his campaign for at least 30 days.
It also wants any support he already collected to be canceled.
Garg says Better’s accusations are nonsense.
The disagreement will now be handled in court.
Better Home & Finance asked a New York court to block Vishal Garg from soliciting shareholder support for at least 30 days.
The company alleges Garg violated federal securities laws by seeking shareholder backing without required proxy disclosures.
Better’s board unanimously removed Garg as CEO on August 3 after losses exceeded $1.5 billion since 2022 and the stock fell more than 90%.
Garg says he has support from more than half of voting shareholders and dismisses Better’s allegations as nonsense.
Garg offered to return for $1 a year, while demanding that five directors resign and Daniel Lewis leave the CEO position.
- Who
- Better Home & Finance and its former CEO and founder, Vishal Garg, with CEO Daniel Lewis and the company’s board also involved.
- What
- Better sued Garg and asked a court to stop his campaign to regain the CEO position and invalidate shareholder support he has collected.
- Where
- The case was filed in the United States District Court for the Southern District of New York.
- When
- The board removed Garg on August 3; the lawsuit was filed on a Tuesday, and the dispute continued through August.
- Why
- Better says Garg violated federal securities laws and used misleading statements while seeking shareholder support without required proxy disclosures.
Better Home & Finance and Its Board
Vishal Garg
Shareholder campaign
Better Home & Finance and Its Board
Better says Garg unlawfully gathered shareholder support, made misleading statements, and failed to file proxy disclosures required by the Securities and Exchange Commission.
Vishal Garg
Garg says he has already secured support from more than half of voting shareholders and rejects Better’s allegations as nonsense.
Leadership and governance
Better Home & Finance and Its Board
The board says Garg’s return effort is a scorched-earth campaign and wants to follow the company’s formal governance procedures.
Vishal Garg
Garg wants five of Better’s eight directors to step down and Daniel Lewis to leave the CEO role so he can return.
Future of the company
Better Home & Finance and Its Board
Better points to major losses, a sharp stock decline, and concerns about management culture as reasons for removing Garg.
Vishal Garg
Garg says Better can become profitable again, citing AI tools and a crypto-backed mortgage product developed during his tenure.
Key facts
- Requested court order
- A 30-day freeze on Garg’s solicitation or collection of shareholder support.
- Board action
- Better’s board voted unanimously on August 3 to remove Garg as CEO.
- Reported losses
- Better has recorded more than $1.5 billion in net losses since 2022.
- Stock decline
- The company says its stock price fell more than 90% under Garg’s leadership; the article also reports a 93% first-day decline after its 2023 IPO.
- Garg’s proposal
- He offered to work for $1 per year until Better becomes profitable, in exchange for five directors resigning and Lewis leaving as CEO.
- Earlier layoffs
- Garg fired 900 employees during a Zoom call in December 2021 and later apologized for how the layoffs were communicated.
- Current valuation
- Better is valued at about $300 million, compared with a reported pandemic-era peak of $7.7 billion.
Quotes
Vishal Garg
Founder and former CEO of Better Home & Finance
“I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better.”
indianexpress.com
“The only people who may have committed securities law violations are Daniel Lewis and the board.”
indianexpress.com
Sources
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