Two boards are fighting retention battles this spring. Better's poison pill—a 15% threshold rights plan adopted in February—was blocked by Delaware Chancery rulings in late March, leaving founder Vishal Garg's proxy campaign intact. Ethan Allen is contesting a challenge from Bergeron Holdings, which has pressed the furniture maker on buybacks and board composition since early January. Both fights arrive as operational discipline tightens across consumer discretionary.
Better's board installed the poison pill after Garg, who owns roughly 27% of the post-SPAC entity, announced plans to nominate a competing slate. The company argued the threshold was necessary to preserve tax attributes and prevent a change of control outside normal governance channels. Two separate judges disagreed. The first ruling, issued March 24, denied Better's motion for expedited enforcement. A second opinion, dated March 27, declined to block Garg's solicitation efforts on antitrust grounds. The poison pill remains on the books but cannot prevent Garg from campaigning or soliciting proxies for the May 15 annual meeting. Better's stock trades near $0.85, down from a SPAC-merger high above $10 in late 2021.
Ethan Allen's challenge is structural rather than judicial. Bergeron, which disclosed a 6.2% stake in January, has criticized the board for holding excess cash—roughly $180 million at last report—while the share price has underperformed the S&P Retailing Index by 18 percentage points over twelve months. Bergeron's public letters suggest the company should either accelerate buybacks, increase the dividend, or explore strategic combinations. The board has declined to make immediate changes, citing ongoing store-network investments and the need to maintain balance-sheet flexibility in a softening home-furnishings environment. The annual meeting is scheduled for late June.
The fights matter because proxy seasons are no longer symbolic. Better's case is a test of whether Delaware courts will allow boards to use poison pills defensively against founder-led campaigns when the founder already holds a blocking minority. The Ethan Allen situation is simpler but no less instructive: a profitable, cash-generative legacy brand is being pressed to prove it can deploy capital more efficiently than an activist hedge fund. Both outcomes will signal how much latitude boards retain when shareholders—or former operators—decide the status quo has run its course.
Operators and allocators should watch three dates. Better's proxy deadline is April 22, with the meeting on May 15. If Garg wins three or more board seats, expect immediate financing discussions and a probable attempt to take the company private or merge it into a larger mortgage platform. Ethan Allen's meeting is set for June 26. If Bergeron wins even one seat, the board will likely announce an accelerated buyback program within 90 days to preempt further challenges. Both fights will close before the summer proxy lull, so position adjustments should happen in May.
The practical outcome is already visible in the options market. Better's $1.00 calls expiring in June are trading at $0.12, implying a 42% chance the stock breaks a dollar if Garg wins. Ethan Allen's implied volatility has risen 6 points since Bergeron's initial filing, with no corresponding earnings catalyst. That spread is the cost of governance uncertainty, and it compounds until the votes are counted.