Vishal Garg's proxy campaign to retake Better.com cleared preliminary court tests in both New York and Delaware on January 16, with judges blocking the board's poison pill defense at the temporary restraining order stage. The dual rulings preserve Garg's ability to solicit votes for his slate of directors ahead of the company's annual meeting, currently scheduled for late February. Better.com's board adopted the shareholder rights plan in December after Garg, who founded the digital mortgage lender in 2014, publicly announced his intention to replace the existing directors.
The New York Commercial Division granted Garg's motion for a temporary restraining order against the poison pill, finding sufficient questions about whether the defensive measure violated Delaware corporate law to warrant preliminary relief. Within hours, a Delaware Chancery Court judge issued a similar order, preventing Better.com from enforcing the rights plan's 10 percent ownership trigger until a full hearing on the merits. Garg currently holds approximately 28 percent of the company's outstanding shares through direct ownership and affiliated entities. The poison pill would have diluted his stake if he acquired additional shares or solicited proxies without board approval.
The rulings matter because they set the procedural timeline for what will likely be a contested annual meeting in six weeks. Better.com's board must now defend its poison pill at preliminary injunction hearings in both jurisdictions, with Delaware Chancery setting a February 4 hearing date. If the injunctions are granted at that stage, Garg's proxy fight proceeds without the dilution threat, and institutional holders—including SoftBank, which invested $1.5 billion in Better.com through multiple rounds—will face a binary choice between incumbent directors and Garg's nominees. If the board prevails and the poison pill stands, Garg's solicitation rights become severely constrained, and the proxy contest collapses before the vote.
The market signal is the gap between Better.com's private valuation and its operational reality. The company was last valued at $7 billion in a 2021 SPAC deal that never closed. Mortgage origination volumes fell 68 percent industrywide from 2021 to 2023, and Better.com's workforce shrank from over 9,000 employees to fewer than 3,000 through multiple layoff rounds, including Garg's December 2021 Zoom termination of 900 employees that drew national attention. The board's decision to adopt a poison pill suggests it views Garg's return as an existential governance risk, not merely a succession dispute. Garg's willingness to litigate in two states simultaneously signals he has both the capital and conviction to pursue the fight through trial if necessary.
Allocators tracking distressed fintech situations should monitor three developments. First, whether SoftBank or other major institutional holders file their own legal briefs or public statements before the February 4 hearing—radio silence from $1.5 billion investors is itself a signal about how they intend to vote. Second, whether Better.com's board announces a CEO succession plan or strategic transaction before the annual meeting, which would reframe the proxy contest from governance to deal evaluation. Third, whether Garg's ownership group makes any further share purchases or derivative acquisitions in the interim, which would test the enforceability of the poison pill even under temporary restraining order.
Better.com's board has until January 30 to file its opposition brief in Delaware. Garg's nominees have not yet been publicly disclosed.