Vishal Garg is fighting to regain control of the company he founded.
The
"I decided to work with the investors that wanted to bring me back and have now asked the board to step aside, help elect some new board members and effectuate change," Garg told National Mortgage News Thursday evening. "We can go back to what's happening at Better. The comeback story was in full force, and it was just paused abruptly."
The former CEO cited the company's stock, which fell precipitously since his abrupt departure last week. Better's stock was trading at a height of $27.30 per share on the day of Garg's ousting, and after market close was trading at $15 Thursday evening.
The board of directors replaced Garg with Daniel Lewis, a former banking director and hedge fund boss who most recently led a fundraising firm. Garg did not specifically reference Lewis in his press release and declined to comment on the interim CEO Thursday evening.
Better replied to Garg in a press release Friday morning, explaining the board's move to end the ex-CEO's "value destructive leadership" and suggesting he may have violated securities laws.
Garg has retained the high-profile attorney Alex Spiro, a New York-based partner at Quinn Emanuel Urquhart & Sullivan LLP. The former CEO didn't threaten an immediate lawsuit in Thursday's press release but emphasized that the majority of shareholders could call a special meeting of stockholders.
The founder told NMN Thursday night that he's hoping the board acts on his requests.
"Otherwise, with a majority of shareholders all seeking for things to go back to the way they were, it's not an if, it's just a when," he said.
Garg's plan
The founder's return plan includes a $30 million stock buyback and a $5 million personal investment as part of a 10b5-1 stock plan, according to the press release. Garg also said he would complete the sale of Better's banking business in the United Kingdom, which he expects to generate approximately $74 million in gross proceeds.
The former CEO emphasized he would continue Better's cost-cutting efforts and growth trajectory. While the lender has
Garg wants to retain directors Michael Farello and Hugh Frater to work with a newly constituted board, although he didn't elaborate on the directors. Farello is a managing partner at private equity firm L Catterton, while Frater is the
The ex-CEO said he would transition to a chairman or chief product and innovation officer role after the company finds a new leader. He told NMN his own strengths lie in product innovation, growth and business development, and suggested Better was "at the five-yard line" in terms of turning a corner.
"This is not about me being the CEO," he said. "This is only about making Better achieve its full potential and being able to make homeownership cheaper, faster, better for all Americans."
Better responds
The company said Friday that its board, excluding Garg, unanimously voted to terminate the CEO "following a series of decisions and actions that raised serious concerns regarding his judgment, temperament and credibility."
The
Countering Garg's demand to be restored to the company, the Better statement accused him of refusing to timely submit mandatory representation letters required for the lender to make its 10-Q Securities and Exchange Commission filing, "seemingly in an effort to extract self-serving concessions" from the firm.
The board said it respects the right of shareholders to take action, but clarified that governance processes have requirements that protect all shareholders, and that it will not be bullied into actions they believe don't serve larger interests.
Further, the board said it's reviewed communications that, based on its legal advisor's analysis, indicate Garg's direct involvement in "conduct counsel believes may constitute violations of U.S. securities laws."
The company did not elaborate on the claim, and urged shareholders to not take any actions at this time.
