Two courts ruled against Better.com's board on the same day, invalidating the poison pill defense and extending founder Vishal Garg's timeline to contest control of the $7.7 billion-valued mortgage lender. The Delaware Court of Chancery and New York Supreme Court issued separate temporary restraining orders blocking enforcement of the rights plan adopted in late March. The dual rulings keep Garg's proxy campaign viable through the rescheduled shareholder meeting, now set for late April.
Better.com's board installed the poison pill March 24, three days after Garg filed preliminary proxy materials seeking to replace five directors. The defense mechanism would have triggered dilution if any shareholder crossed 15 percent ownership without board approval. Garg currently holds approximately 28 percent of the company and argued the pill was adopted without proper notice to existing shareholders. Both courts found enough merit in his Delaware Section 225 and New York Article 78 claims to pause the defense pending full hearings. The New York action also challenges the April meeting itself, which the board called on 45 days' notice instead of the 60 days Garg's team claims the bylaws require.
The rulings matter because they reopen a governance contest most allocators had written off after the pill went up. SoftBank Vision Fund holds roughly 38 percent of Better through its $1.5 billion investment across three rounds since 2019. The Japanese fund backed the current board's decision to remove Garg as CEO in November 2024, installing former Ally Financial executive Kevin Ryan. Garg has since argued the board breached fiduciary duty by rejecting his $500 million recapitalization proposal and moving to dilute his stake. Without the pill, Garg can now solicit proxies freely and potentially force a vote on his slate before the board secures additional financing or a strategic transaction.
Better's cash position adds urgency. The company reported $89 million in liquidity at year-end 2024, down from $340 million twelve months prior, with quarterly cash burn running near $60 million. Management has disclosed it is evaluating a $200 million convertible note and a separate $150 million equity placement, both of which would dilute Garg further if completed before the shareholder vote. The TROs now compress the board's optionality window. If Garg wins enough seats to block or delay either financing, Better faces a refinancing deadline in Q3 2025 when its existing $750 million credit facility matures.
Operators should watch for three specific events. First, full evidentiary hearings in both jurisdictions are scheduled for the week of April 14, likely producing final orders on the poison pill and meeting date within 72 hours. Second, Better's CFO is expected to update liquidity guidance during an April 10 noteholder call, which will clarify whether the company can operate through Q3 without new capital. Third, proxy advisory firms ISS and Glass Lewis typically publish voting recommendations 10 to 12 days before contested meetings, and their stance on Garg's director slate will determine how many passive index holders vote his shares.
The dual TROs preserve Garg's path to board control, but his leverage expires the moment Better closes either financing transaction. SoftBank has not yet disclosed whether it will participate in the equity placement or backstop the convert, and that decision will dictate the shareholder vote math more than any court ruling.