Better Home & Finance sues founder Vishal Garg over alleged “scorched-earth” campaign

Better Home & Finance (the digital-mortgage lender formerly known as Better.com) filed a lawsuit against its founder and former chief executive Vishal Garg, accusing him of an illegal “scorched-earth campaign” to wrest control of the company after the board removed him as CEO. The complaint alleges that Garg solicited shareholder support without filing required proxy statements, spread misleading statements, and demanded the resignation of all board members.

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Vishal Garg founded Better Homes in 2016. The company processed more than $110 billion in loans and went public via a SPAC merger in 2023, backed by SoftBank and Goldman Sachs. In 2021, Garg fired roughly 900 employees during a brief Zoom call before the holiday season, later referring to staff as “dumb dolphins” and “mortgage monkeys.” He was placed on leave after that layoff, reinstated as CEO in 2022, and oversaw a period in which net losses exceeded $1.5 billion and the stock price fell more than 90 percent.

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• August 3 – The board voted unanimously, excluding Garg, to remove him as CEO.

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• August 10 – Garg allegedly sent a letter to the board demanding that all members resign.

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• Layoffs: Approximately 900 employees dismissed in 2021.

The Independent

• Financial losses: Net losses reported at over $1.5 billion since 2022.

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• Stock performance: Share price declined by more than 90 percent during Garg’s tenure.

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• Sales figures: Reported sales dropped from $1.5 billion in 2021 to $70 million in 2023; the company is on pace for $200 million in sales this year.

The Independent

• Shareholder claim: Garg asserted he had “already corralled 52 percent” of the shareholder vote, despite no filed proxy statements.

The Independent

• Board action: The company’s board issued a unanimous vote to remove Garg, citing the financial decline and loss of confidence.

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• Legal request: Better Home & Finance asked the court to void all shareholder approvals obtained by Garg and to bar him from seeking additional shareholder support for at least 30 days.

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• Valuation: One source notes the company’s valuation fell from an $8 million peak during the pandemic to $300 million later, while another emphasizes a 90 percent stock price drop without providing a comparable valuation figure.

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• Sales outlook: The lawsuit cites severe financial losses, whereas Garg’s own remarks claim the firm has “tripled loan volume” and is “close to profitability.” The discrepancy between the plaintiff’s loss figures and the founder’s profitability claim remains unresolved.

The Independent

• “We’re winning. We’ve tripled loan volume. We’re close to profitability,” — Vishal Garg, tuesday sued founder

The Independent

The court will consider Better Home & Finance’s request to invalidate Garg’s shareholder solicitations and enforce a 30-day prohibition on further shareholder outreach. The outcome will determine whether Garg can continue his bid to regain control of the company.

Forbes