Better Home & Finance sues former CEO Vishal Garg to block shareholder campaign

US-based Better Home & Finance has asked a US court to stop former CEO Vishal Garg from seeking shareholder support for at least 30 days, escalating a fight that began after the mortgage technology company removed him from the CEO role earlier this month. In a complaint filed in the US Southern District of New York, Better Home accused Garg of violating federal securities laws by allegedly seeking to build shareholder support to regain his job and making misleading statements. According to a report by Fortune, the company is also asking the court to cancel any shareholder approval Garg may have already collected.

Better Home's board voted unanimously, excluding Vishal Garg, to remove him as CEO on August 3. The company cited net losses of more than $1.5 billion since 2022 and a more than 90% fall in its stock price during Garg's tenure. After his removal, Garg launched what Better Home described in its complaint as a “campaign of retribution.” On August 10, Garg sent a letter to the company's board calling for the immediate resignation of all board members. He also said he had formed a “group of concerned shareholders” to help bring him back as CEO. In its complaint, Better Home alleges that Vishal Garg sought shareholder support through press releases, text messages, social media posts and an interview with Bloomberg. The company also claims Garg said he had “already corralled 52%” of the shareholder vote without filing the required proxy statements with the Securities and Exchange Commission (SEC). Better Home is asking the court to prevent Garg from seeking shareholder support for at least 30 days and to void any shareholder approval he may have already obtained.

Vishal Garg was removed from the CEO position earlier this month after Daniel Lewis joined Better Home's board and was appointed CEO. Garg has since asked the board to reverse the decision and reinstate him. He has also offered to work for $1 a year until the company returns to profitability, after which he says he would step down. “It's an acknowledgement that I've been doing this for 10 years, but execution hasn't been perfect,” Garg said in an interview. “I hope it gets resolved. I think the future still remains very bright for Better.” Garg argues that his removal came as the company was working toward a potential turnaround. He also says that some investors contacted him after his ouster and wanted him to return.

Vishal Garg is best known for a mass layoff in 2021, when he fired about 900 employees during a 79-second Zoom call. The incident drew widespread attention and damaged his reputation. Garg later described the employees as “lazy.” The company had previously said he was placed on leave following the mass layoffs. Garg was later reinstated as CEO in 2022 and was replaced this year.