Vishal Garg wins shareholder support for Better comeback

Vishal Garg says he's secured the shareholder support to back his comeback plan at Better Home & Finance, in what his attorney is describing as a first-of-its-kind victory.

The founder and ex-CEO said Wednesday morning that The Garg Group has secured written consents representing over 51% of the voting shares of Better, after a nearly two-month battle. Garg was ousted Aug. 3, and he has spent the last several weeks campaigning for his return with a proposed 90-day turnaround plan and a reshaping of the company's leadership. 

"This is a resounding victory for Better's shareholders, customers and employees, who all participated in organizing the resistance to the coup led by Daniel Lewis and the incumbent board," said Garg in a press release, referring to the interim CEO. "Now we get back to the work of driving Better to a new chapter of profitable growth building on the progress we have made in the past two years in establishing Tinman AI, the best platform in the mortgage industry."

Garg's plan includes tapping an interim CEO with prior mortgage experience, and the founder serving as head of product, platform and innovation after the transition. 

That timeline is uncertain, as the company must formally accept the proxy results, the founder noted in a press release. A spokesperson for Better said the company declined to comment Wednesday morning. 

The sides have sparred in both the court of public opinion and New York federal court, where Garg won an early battle regarding his Securities and Exchange Commission solicitations to shareholders. Alex Spiro, a New York-based partner at Quinn Emanuel Urquhart & Sullivan LLP, suggested the Better founder's triumph was an unprecedented win. 

"No public CEO has ever been pushed out, litigated the issue, and won his way back in two months," said Spiro in a statement. "Vishal Garg has been vindicated."

Garg's comeback plan

The Garg Group says it will remove interim Lewis and Better directors Harit Talwar, Bhaskar Menon, Arnaud Massenet, Prabhu Nasimhan. They'll then appoint Bing Gordon and Steve Sarracino, two Silicon Valley venture capitalists. 

Other aspects of the comeback plan include:

• Retaining a "Tier 1 advisory firm" to streamline operations and raise annual cost-savings targets from $45 million to $60 million;
• Finalizing partnerships for the company's Tinman artificial intelligence platform, and scaling home equity line of credit production to achieve $2 billion in quarterly combined volume;
• Completing the sale of the company's banking operations in the United Kingdom. 
  

The new leadership has also pledged a $30 million stock buyback plan, beginning with an initial $10 million tranche upon board approval. The Garg Group will also hold an informal conference call with shareholders regarding the plan next Monday, it said. 
Spiro, Michael Swartz and Minji Reem of Quinn Emanuel served as legal advisors to The Garg Group, as well as Andrew Freedman and Mark Kiley of Olshan Frome Wolosky LLP. Longacre Square Partners also provided strategy and governance advice to the Garg Group. 

Better performance

The company's stock rose on the news of Garg's shareholder victory, rising from $10.38 per share at market open to $12.25 per share around 11 a.m. 

Garg would return to the lender which has struggled to turn a profit since going public in 2023. The company posted a $30.6 million net loss in the second quarter. Lewis, helming his first earnings call in August, suggested the company would shift toward an enterprise strategy and expand into the wholesale space.