Courts in Delaware and New York issued coordinated rulings blocking Better.com's poison pill defense, preserving founder Vishal Garg's ability to nominate directors ahead of the May shareholder meeting. The dual temporary restraining orders — issued within forty-eight hours of each other — prevent the board from enforcing a dilutive rights plan that would have triggered at 10% beneficial ownership. Garg currently holds 9.8% through affiliated vehicles. The company's enterprise value sits near $7 billion post-SPAC combination, with $340 million in trailing revenue.

The Delaware Chancery Court found the poison pill likely violated the company's certificate of incorporation, which requires board action on defensive measures to receive majority stockholder approval within ninety days. Better's board adopted the plan on March 14 without scheduling a ratification vote. New York Supreme Court separately ruled the pill presented irreparable harm to Garg's proxy solicitation, which had already secured $1.2 million in committed financing for the campaign. Both courts noted the board failed to demonstrate imminent threat from Garg's stated intent to replace three of seven directors.

The rulings matter because Better.com operates in a mortgage origination market where $1.9 trillion in purchase-money loans closed in 2024, down 22% year-over-year. The company's digital-first model captured 2.1% share in Q4 2024, but customer acquisition costs rose 18% quarter-over-quarter as rates held above 6.8%. Garg's proxy materials argue the current board prioritized partnerships with traditional brokers over the direct-to-consumer technology stack that originally attracted SoftBank's $750 million Series D in 2021. If Garg wins three seats in May, he gains effective veto power over capital allocation decisions, including a proposed $200 million warehouse line expansion the CFO disclosed in February filings.

Allocators should watch three developments. First, whether Better's board appeals the temporary restraining orders by April 18, when preliminary injunction hearings are scheduled in both jurisdictions — Delaware Chancery typically decides within fourteen days of argument. Second, Garg's April 25 deadline to file definitive proxy materials with the SEC, which will disclose his three director nominees and outline specific operational changes. Third, whether institutional holders representing the 34% non-affiliated float — led by Fidelity's 8.2% stake and BlackRock's 6.1% — file amended 13Gs indicating support for management or the activist. Proxy advisory firms ISS and Glass Lewis typically publish recommendations eight to ten days before record date, expected around May 5.

The May shareholder meeting will test whether public-market investors value Better's $82 million EBITDA run-rate under current management more than Garg's argument that the platform should prioritize unit economics over origination volume growth in a 6.5%-to-7.2% rate environment that persists through 2025.