Better Home & Finance has effectively waved the white flag in its bitter board battle with founder and former CEO Vishal Garg, clearing the way for Garg to regain control of the company less than two months after he was ousted.
In an announcement Monday afternoon, Better said its special committee had withdrawn its challenge to the results of Garg’s shareholder consent solicitation, citing the “costs and uncertainty of a prolonged contest.” An independent election inspector subsequently certified that shareholders representing 52.02 percent of Better’s outstanding voting power supported removing interim CEO Daniel Lewis and directors Harit Talwar, Arnaud Massenet, Bhaskar Menon and Prabhu Narasimhan.
The reversal comes less than two weeks after Better was still aggressively fighting Garg’s effort to regain control. The company’s investor-relations page now offers something of a running chronicle of the battle, with press releases disputing Garg’s support claims, touting recommendations from proxy advisers ISS and Glass Lewis opposing his campaign and, as recently as Sept. 24, announcing an investigation into allegations involving his consent solicitation.
Garg declared victory Sept. 30 after his shareholder group said it had crossed the majority threshold, though Better had not yet publicly accepted the result at the time.
The fight began shortly after Better’s board removed Garg as CEO in early August. Better later sued Garg, accusing him of securities-law violations tied to his effort to regain control. Court filings subsequently showed that an earlier claim of majority shareholder support had fallen short because of what Garg’s side described as an administrative error in calculating voting power.
But this time, Garg actually had the votes.
Better’s board has been reduced to five seats, with Garg initially becoming the sole remaining director before appointing Bing Gordon, Steve Sarracino and two Better employees. The company is also moving to unwind the poison pill adopted during the fight and dismiss its federal lawsuit against Garg.
While Garg has effectively wrested back control of the company, he has not returned as CEO. Better said it has identified an interim CEO candidate and is finalizing the engagement as Garg launches what his camp is calling “Better 2.0.”
A communications firm representing Garg has not responded to multiple Inman inquiries about Garg’s return to control of Better.
