Vishal Garg's proxy campaign to retake control of Better.com cleared dual preliminary hurdles Thursday when New York Supreme Court and Delaware Chancery granted temporary restraining orders blocking the company's poison pill and board expansion. The rulings do not decide the underlying merits but halt defensive maneuvers long enough for Garg to mount his challenge at the annual meeting, now scheduled for March 27. Better had enacted a shareholder rights plan in February — standard poison pill architecture — lowering the trigger threshold to 4.9% beneficial ownership and expanding the board from seven to nine seats, filling both with management-aligned directors. Garg, who owns roughly 6% personally and controls another 7% through affiliated entities, sued within days.

The dual-jurisdiction fight reflects Better's Delaware incorporation and New York operational headquarters. Garg's legal team argued the pill and board expansion violated both corporate statutes and the company's own certificate of incorporation, particularly restrictions on unilateral board changes within 90 days of a record date. The New York judge found sufficient likelihood of success on the bylaw question to issue the TRO. Delaware followed with its own restraining order hours later, citing similar procedural irregularities and the near-term shareholder meeting. Neither ruling addresses whether Garg's removal as CEO in 2023 — after the layoff Zoom call that drew national attention — was justified or whether his governance style warrants permanent exclusion from board influence.

The operational stakes are narrow but the signaling is clear. Better has been attempting a controlled wind-down or sale since late 2023, when its SPAC combination with Aurora Acquisition Corp collapsed and the mortgage refi wave ended. The company laid off more than 4,000 employees across multiple rounds, shut down its real estate brokerage, and pivoted to a leaner direct-to-consumer mortgage model. Garg's return would likely mean a strategy shift — either a faster liquidation to preserve equity value or an attempt to recapitalize and relaunch, depending on his read of the 2025 housing cycle. Institutional holders, including SoftBank's Vision Fund which wrote down its position to near zero, have largely exited. What remains is a mix of employee equity, early venture holders, and Garg's own stake. The poison pill's 4.9% threshold was unusually low, suggesting management feared even modest accumulation by Garg-aligned buyers could tip the proxy vote.

Allocators watching distressed fintech or mortgage platforms should track three follow-on events. First, the Delaware court will hear arguments on a preliminary injunction by late March, likely March 24-25, which would extend or dissolve the TRO ahead of the meeting. Second, proxy advisory firms ISS and Glass Lewis will issue voting recommendations by mid-March. Both have historically opposed poison pills enacted without shareholder vote during live proxy contests, but Garg's personal conduct history complicates the governance optics. Third, any Garg victory at the March 27 meeting would trigger immediate questions about CEO succession and whether he attempts to reinstall himself or appoints a proxy operator. The company's last disclosed cash position was $18M as of Q3 2024, enough for 6-9 months at current burn, which puts any strategic review on a tight clock.

Better's equity last traded on secondary markets at roughly $0.08 per share in January, down from a SPAC-implied valuation of $7.7B in 2021. The company has not filed financials since the SPAC termination, but mortgage origination volume dropped 62% year-over-year through Q3 2024 according to HMDA data. Garg's legal standing remains uncertain past the TRO stage, but the dual rulings mean his slate of director nominees will appear on the ballot and management cannot dilute his voting power before the meeting. The outcome hinges on whether remaining shareholders view Garg as a liquidation-maximizing operator or a governance risk that justifies entrenching the current board despite the poison pill's procedural flaws.