The new interim CEO of Better.com took a trip to the south of France for vacation during his first full week in charge, while the company’s founder was reportedly organizing efforts to oust him. Sources indicate that Vishal Garg, who previously gained attention for firing 900 employees via a Zoom call in 2021, has mobilized investors representing 52% of the company’s voting stock in a move to replace interim CEO Daniel Lewis and five board members.
Many at Better.com were aware of Lewis’s plans to take a week off in the south of France. In a Zoom call from what seemed to be his vacation spot, Lewis’s travel plans were openly discussed within the company, making them no surprise.
The turmoil comes as a struggle for control of Better intensifies, with dissenting shareholders already issuing demands to the company’s lawyers and gearing up to call for a vote to remove Lewis and his board if they don’t step down.
In a show of seriousness, the rebels have enlisted the well-known law firm Quinn Emanuel to help organize shareholder agreements on behalf of various voting groups. It’s anticipated that the process to initiate a shareholder vote could unfold in as little as 10 days, though it could stretch to 35 days depending on various factors.
This discontent follows closely on the heels of the board’s decision to replace Garg with Lewis, who had only joined the board about a week prior to Garg’s ousting.
In a relevant aside, it’s noteworthy that Lewis pleaded guilty to a DUI charge from 2022, which occurred in East Hampton, as indicated by public court records. He faced consequences like a conditional discharge, a revoked license, and fines.
The timing of Garg’s termination was abrupt; he was informed around 1 p.m. on August 3, and his email was cut off shortly afterward, all while Better shares were still actively being traded. No specific reason was provided for his removal, aside from the board’s belief that Lewis could perform better in the role.
After his firing, Garg was offered a position as vice chairman, which is said to come with a significant salary. However, the company released a statement later that diverged from the initial announcement, claiming that all board members except Garg had voted unanimously for his termination due to concerns regarding his judgment and conduct.
In a surprising twist, the board stated that Garg had delayed important quarterly filings, asserting that his refusal to sign necessary documents was the primary cause for these delays. Yet, sources close to Garg insisted he had repeatedly asked for the final version of this filing, which he received only shortly before the deadline.
The board has since criticized Garg for managing to amass a cumulative net loss exceeding $1.5 billion and witnessing a sharp decline in stock price over the past couple of years. While officials did not dispute the losses, they argued that most of the downturn occurred earlier during the mortgage recession, asserting that Better’s financial condition has significantly improved recently.
In the backdrop of this turmoil, Nicholas Calamari, Better’s co-founder and chief legal officer, was also placed on administrative leave, with reports suggesting he was informed that his role might soon be terminated.
The ongoing battle for control within Better follows a period of disruption, including staff cuts in response to a decline in demand following the pandemic-era boom and rising interest rates.
Notably, Garg had faced backlash in December 2021 for conducting mass layoffs during a Zoom call, a decision he later apologized for after stepping back from the company for a time.
Better.com went public in August 2023 thanks to a long-postponed merger with Aurora Acquisition Corp. Presently, the company’s board is urging shareholders to refrain from taking any actions as Garg’s supporters prepare to attempt a management overhaul.
If Lewis and the other board members refuse to resign, dissatisfied shareholders are set to push forward with efforts to remove them from their positions.
