Ex-CEO Vishal Garg may be rewriting the playbook on how to reclaim a company, as the founder's high-stakes battle with Better Home & Finance reaches another critical stage. 

The former Better boss received approval Thursday from the Securities and Exchange Commission to begin soliciting shareholder support for his comeback plan, his attorney confirmed. Better, fearful that Garg could potentially garner majority shareholder support for his plan, is awaiting a judge's ruling on a temporary restraining order on the founder. 

The sides will also appear before the Delaware Chancery Court Friday afternoon, regarding Garg's own move for a TRO on the company's "poison pill" plan to further hinder his comeback attempt. Since his firing Aug. 3, Garg has rallied shareholders and has claimed significant support for his plan to return as CEO and dismiss five of the company's eight directors. 

The power struggle has put the company under duress, as its stock has declined almost 50% since the CEO's abrupt ousting. It has slowly climbed this week, however, and was trading at around $14.40 per share midmorning Friday. 

Actions hinge on court ruling

As of Friday morning Garg and the company were still awaiting a decision from U.S. District Judge Margeret M. Garnett, regarding a TRO on Garg's solicitations over his alleged deficiencies in filings. 

In a hearing Wednesday not attended by Garg nor interim CEO Daniel Lewis, attorneys sparred over technicalities regarding Garg's SEC filings in recent weeks. While attorneys for Garg said a block is necessary to protect all shareholders, counsel for the founder insisted he's properly updated his filings. 

The sides will meet in the Delaware Chancery Court early Friday afternoon, Garg's attorney confirmed. An attorney for the company didn't respond to an immediate request for comment. 

Next steps

The company said it's unsure when, or if, Garg would secure a majority of shareholder support following his successful SEC filing. The founder has previously claimed the support necessary for his return plan, and blamed an earlier hiccup on a miscommunication on shareholder numbers from Better's internal counsel. 

Better has rationalized its firing of Garg based on the company's massive losses in recent years and his polarizing leadership style. Garg has countered those arguments by pointing to the stock decline since Lewis took over, and the interim CEO's lack of fintech and artificial intelligence experience. 

According to Garg, the company's directors regretted their decision to fire him and offered him a contract worth over $15 million to work in an advisory role to Lewis for 16 months. When the founder declined because of the role's limited scope, they suggested they would resign and pave the way for his return so he could prove the majority shareholder support, Garg said.

That alleged overture led to the dispute over Garg's SEC disclosures. 

Although Garg's departure has caused market disruption, an employee who's worked at the company since before its initial public offering told National Mortgage News that operations have hummed along. 

The employee noted that since Garg's departure, Better has continued to tout its accomplishments from Garg's tenure. They didn't discount Lewis' potential to lead the company, but questioned his comments as Lewis has publicly fired back at Garg. They also described Garg as "misunderstood", and emphasized that he doesn't lead with bad intentions.

"I think it makes a lot of sense that he wanted to be the chief product and innovation officer," the employee said, referring to his proposed comeback plan. "He's very good at that. He acknowledges his weakness. He doesn't have bad intentions. All those silly comments he made, they're not personal."