The fight over control of Better Home & Finance Holding Co. escalated Friday as founder and former CEO Vishal Garg announced three candidates he wants to add to the company’s board, while Better’s special committee said Garg has again extended the deadline for his shareholder campaign and called on him to abandon his consent solicitation.
Garg, who was removed from his role as CEO by Better’s board at the start of August and replaced by Daniel Lewis, is seeking shareholder support to remove Lewis and other current directors Harit Talwar, Arnaud Massenet, Bhaskar Menon and Prabhu Narasimhan.
Garg has set Oct. 2 as the new target date for submitting written consents, a deadline that was originally set for Sept. 8 and then moved to Sept. 18.
Garg previously said he had secured support representing 50.1% of Better’s voting power and would provide evidence of that support. In a separate release on Friday, however, Better said that he has not delivered consents demonstrating that level of support and that he has failed to demonstrate significant support from public shareholders beyond a small group of longtime allies.
Garg’s director candidates for the board are Bing Gordon, a longtime partner and chief product officer at venture capital firm Kleiner Perkins and a former Amazon director; David Heidecorn, a senior adviser to investment firm L Catterton and former partner and chief risk officer at the firm; and Steve Sarracino, founder and partner of Activant Capital and a former Better director.
The three candidates have expressed a willingness to serve if Garg’s consent solicitation succeeds, but no agreements have been reached with them, Garg’s release stated. Their appointment would require approval from a majority of the board in place at that time.
Garg also said he would seek a new permanent CEO and retain executive search firm Daversa Partners if his campaign succeeds.
Better’s special committee, meanwhile, has urged shareholders to revoke any consents supporting Garg’s proposals. The company said two proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, have recommended that shareholders support Better’s current board.
“Better is moving on from Mr. Garg. It is time for Mr. Garg to move on too,” Better’s release states. “Better’s employees should not have to work under the continued distraction created by Mr. Garg pursuing his personal vendetta. … And our shareholders should not have to bear the expense of a campaign that has failed to gain the support Mr. Garg repeatedly claimed he had.”
In the same release, Better characterized Garg’s campaign as costly and disruptive and said the company has made progress since his departure. Garg, meanwhile, has argued that the company needs board changes and that he should have a “meaningful” role at the mortgage company he founded.
The competing groups are directing shareholders to different consent cards. Better is asking shareholders to sign and return its white consent revocation card, while Garg’s group is asking shareholders to sign and return its green consent card supporting his proposals.
The contentious board battle is in its second month. Since Garg exited the CEO role, the company has undergone a leadership shakeup, with top executives including Chad Smith, Barry Feierstein and Leah Price announcing their departures from Better.
Following Garg’s departure on Aug. 3, he retained the services of attorney Alex Spiro and launched a campaign to regain control of Better.
Better’s board has opposed the effort, pointing to cumulative net losses since 2022 and a more than 90% decline in the company’s stock price during Garg’s tenure as CEO. On Aug. 18, Better sued Garg in U.S. District Court for the Southern District of New York, alleging unlawful solicitation and related disclosure violations.
Garg opposed Better’s request for a preliminary injunction and temporary restraining order, calling the lawsuit meritless. He also sued Lewis and six other directors on Aug. 25, alleging they improperly entrenched themselves after removing him as CEO.
On Aug. 31, a federal judge declined to immediately halt Garg’s shareholder campaign, allowing the solicitation to continue while the broader dispute proceeds. The judge did not determine whether Garg violated securities laws, finding that Better had not shown the campaign would cause irreparable harm.
Just a few days later, Garg unveiled a 90-day operating plan, should he regain control, which called for $2 billion in quarterly funded volume, $7 million in additional monthly revenue and eliminating the company’s $4 million monthly cash burn. Better’s board dismissed the plan as “unworkable” and “conspicuously late.”