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Few corporate disputes play out as openly as the one now unfolding at a digital mortgage company that once captured the excitement around financial technology. The special committee of the board at Better Home & Finance Holding Company (NASDAQ: BETR) sent a letter to shareholders asking them to reject an effort by the company’s founder and former chief executive, Vishal Garg, to reclaim control. The letter is the latest turn in a fight that has grown more public, and more personal, over the course of the month.
The company is one that most casual investors have never examined closely. It offers home loans directly to consumers, including conforming, FHA, VA and jumbo mortgages, along with title, real estate and insurance services. It built its name on an artificial intelligence loan platform called Tinman, and it reached the public markets through a merger with a special purpose acquisition company, the kind of blank check deal that was popular a few years ago.
The current conflict began earlier in August. The board, meeting without Garg, concluded he was no longer fit to lead and removed him as chief executive, appointing Daniel Lewis as interim head and opening a search for a permanent successor. Garg at first seemed to accept the change. He then reversed course and started a campaign to remove five of the eight directors and return himself to a leadership role. Because he holds shares carrying extra voting power, the committee argues he is trying to take control without paying other holders a premium for it.
To make its case, the committee points to Garg’s record. It says that during more than a decade in charge, the company accumulated over $2 billion in net losses and lost more than 90% of its value as a public enterprise. It notes that a 2021 investor presentation projected more than $5 billion in revenue for 2023, while the company actually recorded roughly $72 million that year. The committee also revisits older episodes, including a 2020 Forbes profile describing a harsh management style and a widely reported 2021 incident in which Garg dismissed about 900 employees on a single video call.
Garg has not stayed quiet. Through his attorney, he filed a court response on August 25th arguing that Better’s lawsuit against him lacks merit and amounts to an attempt by current leadership to protect their own jobs. He has claimed growing shareholder support and taken parts of his argument to social media. His side casts the board’s moves, including a newly adopted shareholder rights plan and the litigation, as defensive tactics meant to keep him out rather than steps taken purely in shareholders’ interest.
For its part, the committee says the business is already improving. It expects to exceed $45 million in annualized cost reductions, it is working to sell its bank based in the United Kingdom, and it plans to launch a wholesale lending program powered by a system it calls TinmanGo later this year. It warns that an abrupt change to the board would disrupt the search for a permanent chief executive and could deter strong candidates.
What lifts this above an ordinary boardroom disagreement is its size and its timing. Better is a small company, with a market value near $267 million and a thin pool of freely traded shares, so its price can swing sharply on news. The result will decide not only who runs the business but what strategy it follows, and holders are being asked to weigh in through a consent process rather than at a scheduled meeting.
The vote gives this story a hard deadline that most governance disputes never have. Whether shareholders side with the committee or with the founder who built the company, their decision will settle a question that has split the boardroom and spilled into open view.
