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The majority of such legal claims and proceedings are in the early stages and, to the extent applicable, have not yet reached the class certification stage and as such the ultimate outcomes cannot be predicted with certainty due to inherent uncertainties in the legal claims and proceedings.
−Removed: As part of the disputes, the Company included an estimated liability of $8.4 million as of both December 31, 2023 and 2022 on the consolidated balance sheets.
−Removed: During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
+Added: As part of the disputes and other legal matters, the Company included an estimated liability of $8.3 million as of both December 31, 2024 and 2023 on the
+Added: consolidated balance sheets.
+Added: In June 2024, the Company settled a California action alleging violations of the California Private Attorneys General Act (PAGA) for a non-material amount.
A determination in, or settlement of, any legal proceeding relating to classification of our employees could materially and adversely affect our business, financial condition, results of operations, and prospects.
In addition, our CEO is, and potentially Better Home & Finance may be, subject to litigation as described above in “Risk Factors—Risks Related to Our Operating History, Business Model, Growth and Financial Condition—Our CEO is involved in litigation that could have a material adverse effect on our revenues, financial condition, cash flows and results of operations.”
−Removed: In the second quarter of 2022, Pre-Business Combination Better and Aurora each received voluntary requests for documents from the Division of Enforcement of the SEC, and subsequently Pre-Business Combination Better and certain other parties received subpoenas, indicating that the SEC was conducting an investigation relating to Pre-Business Combination Better and Aurora to determine if violations of the federal securities laws have occurred.
−Removed: After the requested
−Removed: information was provided, the SEC subsequently informed Pre-Business Combination Better and Aurora on August 3, 2023 that they concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better.
−Removed: For more information, see “Risk Factors—Risks Related to Our Operating History, Business Model, Growth and Financial Condition— We are, and may in the future be, subject to litigation and regulatory enforcement matters from time to time.
−Removed: If the outcomes of these matters are adverse to us, it could materially and adversely affect our business, revenues, financial condition, results of operations, and prospects.”
−Removed: On June 7, 2022, Sarah Pierce, Better’s former Head of Sales and Operations, filed litigation against Better, Mr.
−Removed: Garg, and Nicholas Calamari, our Chief Administrative Officer and Senior Counsel, in the United States District Court for the Southern District of New York, and on December 8, 2022, Ms.
−Removed: Pierce amended her complaint.
−Removed: The operative complaint, includes allegations of whistleblower retaliation related to, among other things, the December 2021 workforce reduction, and alleged violations of the securities laws related to statements made by our CEO regarding the Company’s financial prospects and performance, includes the following causes of action:
−Removed: (i) violation of New York Labor Law §740 against the Company;
−Removed: (ii) violations of the Sarbanes-Oxley Act;
−Removed: (iii) violation of Dodd-Frank;
−Removed: (iii) breach of fiduciary duty against Mr.
−Removed: (iv) breach of fiduciary duty against Mr.
−Removed: (v) defamation against Mr.
−Removed: Garg and the Company relating to comments made about Ms.
−Removed: Pierce’s work for the Company;
−Removed: (vi) defamation against the Company for statements made in the lawsuit regarding enforcement of Ms.
−Removed: Pierce’s loan;
−Removed: (viii) intentional infliction of emotional distress against Mr.
−Removed: (viii) tortious interference against Mr.
−Removed: and (ix) breach of contract against the Company.
−Removed: In addition, Ms.
−Removed: Pierce filed a claim with the OSHA against Better for retaliation which was dismissed by OSHA on August 29, 2022.
−Removed: On September 29, 2023, the Court dismissed the following claims:
−Removed: (i) her Sarbanes-Oxley claim;
−Removed: (ii) her Dodd-Frank claim;
−Removed: (iii) her breach of fiduciary duty claims;
−Removed: (iv) her defamation claim against the Company;
−Removed: (v) her claim of intentional infliction of emotional distress against Mr.
−Removed: (vi) her breach of contract claim;
−Removed: and (vii) her tortious interference claim.
−Removed: Fact discovery has begun and Better and Mr.
−Removed: Garg intend to vigorously defend the remaining claims.
−Removed: On October 11, 2022, Better filed a summary judgment action in New York state court seeking to enforce the terms of the promissory notes signed by Ms.
−Removed: Pierce, requiring her to pay back a certain portion of the loan and return the remainder of her unvested options under the terms of the notes.
−Removed: Pierce’s counsel removed the action to New York federal court, where Better re-filed its motion.
−Removed: On September 29, 2023, the Court granted the Company’s motion and, on January 5, 2024, entered a judgment in favor of the Company, ordering Ms.
−Removed: Pierce to either:
−Removed: (i) pay the Company $2,277,000 in unpaid principal, and $483,051.93 in unpaid interest, plus additional interest through the date of repayment, plus reasonable costs and attorney’s fees;
−Removed: or (i) return 220,500 unvested shares of common stock, make a payment of $1,161,270 in unpaid principal and $483,051.93 in unpaid interest, plus additional interest through the date of repayment, and reasonable costs and attorney’s fees.
−Removed: The Company is in the process of enforcing this judgment.
There has been and will likely continue to be publicity regarding the litigation and claims discussed above, which could negatively affect our reputation.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.