Vishal Garg says shareholders back his return to Better

Vishal Garg is fighting to regain control of the company he founded. 

The former Better Home & Finance CEO issued a press release Thursday evening, claiming he's secured signed declarations from shareholders representing a majority vote supporting his return plan. Garg demanded that all but two other board directors resign, that he would work under a $1 salary until the lender is profitable and undertake an independent search for a long-term CEO.

"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. 

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. 

A representative for Better didn't immediately respond to a request for comment Thursday evening. 

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 posted steep losses since going public, it has shown some signs of approaching profitability, including larger direct-to-consumer and retail origination volume. Better this year has also announced numerous partnership and product rollouts. 

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 former CEO of Fannie Mae. 

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."