So here's what's going on with Better Home & Finance, and it's quite a situation. According to HousingWire, Vishal Garg, who founded the company, is now suing Better's board of directors and interim CEO Daniel Lewis after being fired from his position. Garg is claiming the board used dishonest tactics to push him out and then put in place what's known as a poison pill, which he says was designed to prevent shareholders from having a say in company decisions. He's bringing the case to Delaware Chancery Court and is asking the judge to throw out both the poison pill and a special committee the board created.
What happened, according to Garg's complaint, is that Lewis, who runs an investment firm called Orange Capital, joined Better's board in late July and then convinced the other directors to fire Garg without cause just a few days later. Since Garg left, the company's stock has dropped significantly, and some of the bigger shareholders have been vocal about wanting him back. The complaint even notes that Lewis was vacationing in France when all this was going down.
Better did offer Garg a different role as vice chairman and advisor, which would have paid him yearly in cash and stock over a year and a half. Garg turned it down because he felt the position didn't have real authority. A couple of days after that rejection, some board members supposedly told him they'd resign if he could show he had the support of just over half the shareholders. Garg says he gathered the necessary consents, but because of an error using data the company itself provided, he ended up claiming more support than he actually had. That became the basis for Better to sue him in federal court for allegedly conducting improper solicitation.
The special committee that Garg challenges also adopted this poison pill mechanism that would kick in if any shareholder reached fifteen percent ownership. The way the pill is written, it's extremely broad and could prevent shareholders from even talking to each other about company matters. Garg argues this goes way too far in restricting the rights of people who actually own the company.
What I'm seeing locally here in the Bay Area is that founder disputes and corporate governance battles like this one are thankfully not something most of us in residential real estate have to worry about. But it's a reminder that even in the lending and real estate tech space where lots of innovation happens in our region, these business conflicts can get messy and expensive fast. For folks looking to work with a lender or any real estate company, it's worth paying attention to who's running the show and whether there's any instability at the top.
