War of words escalates in suit against Better.com

An attorney for Better.com’s former second-in-command suing the lender slammed attacks Friday from opposing counsel and sources in a media report, while claiming the lender is in dire financial straits. 

Attorney Neal Brickman defended Better ex-head of sales Sarah Pierce after lawyers for Better, CEO Vishal Garg and General Counsel Nicholas Calamari asked a federal judge Thursday in separate letters to dismiss Pierce’s whistleblower suit. Her suit accuses Garg and the company of misleading investors about the lender’s financial performance, botching the firm’s first mass layoff and retaliating against her for raising concerns.

Counsel for Better and attorneys representing both Garg and Calamari allege Pierce’s complaint didn’t meet required legal standards and painted it as an attempt to extract more money from the company after her alleged firing in February.

“Notwithstanding the company’s generosity and good will towards Plaintiff, she swiftly abandoned the company at one of its most critical times for personal gains,” wrote Steven Perlstein of New York-based Kobre & Kim on behalf of Garg and Calamari.

Brickman told National Mortgage News Friday afternoon he’s confident U.S. District Court Judge Analisa Torres will allow Pierce’s complaint to remain in the Southern District of New York U.S. District Court.

“If the facts as they actually occurred come out, it presents a very, very bad picture for Mr. Garg and Better,” he said.

Brickman also criticized allegations in a story published Friday in the New York Post, which reported on Pierce’s alleged behavior in Slack messages shared by anonymous former employees. Pierce routinely ignored questions and bragged about not working, the Post reported, and appeared to have mentally checked out following Garg’s Zoom firing in December. 

Pierce joined Better in 2016 as a salesperson and quickly rose the ranks to head of sales and operations, earning a $1 million salary with a bonus of another $1 million, both sides confirmed in legal filings. Brickman called the allegations of Pierce’s lacking performance “garbage” and cited her promotions and performance bonus award, among other internal recognitions.

“Ms. Pierce was not a malingerer,” Brickman said in a separate emailed statement. “This attempted character assassination is the result of Ms. Pierce’s having the courage to speak truth to power.”

Brickman also said SoftBank, Better’s backer, has been in contact with him about the lawsuit and has serious concerns about Garg’s behavior and Better’s financial disclosures. Better is allegedly “dangerously close” to dipping below the cash reserve level required by its warehouse line of credit to fund mortgages and has a cash burn rate of $40 million a month, Brickman said, claiming the information came from a “source with close knowledge.”

“It’s certainly not my area of expertise,” he said. “But I would be shocked if this SPAC transaction ever occurs.”

Better’s anticipated merger with special purpose acquisition company Aurora Acquisition Corp. to go public was announced last May, and the company’s last Securities and Exchange Commission filing was posted two months ago. Aurora Acquisition Corp. had no comment Friday, while SoftBank and Better didn’t return requests for comment Friday afternoon. 

The war of words comes one day after Better’s announcement of eight leadership hires, a rare public statement by the company after months of headlines of mass layoffs and enormous financial losses.