New York jury convicts Vishal Garg of being CEO and founder of digital mortgage company better websiteHe was held liable for breach of fiduciary duty and conversion in a decade-long lawsuit brought by his former partner Raza Khan. Garg plans to appeal.
Court orders Garg to pay $5.5 million Education investment and financing company (EIFC), a company founded in 2009 by the partners.
These resources will be used to pay the company’s creditors, including IRS (IRS) and Garg, which loaned the business at least $2.5 million. The trial took place from May 6 to 17 in New York Supreme Court in Manhattan.
Garg was not found liable for unjust enrichment. Meanwhile, Khan, who initially sought $100 million in damages, was also found responsible for the conversion, according to Garg’s lawyers and May court filings. Garg’s lawyers complained to the judge on July 2 that Khan failed to place funds in escrow related to another conversion judgment related to the case.
Khan’s attorney, David Moreno, said in a brief email that his client had not been found responsible for the conversion, but did not immediately respond to a request for more information or documents.
The civil lawsuit began in 2013, when Khan sued his long-time friend and business partner Garg, accusing him of engaging in “unilateral fraudulent conduct” to divert approximately $2.8 million from EIFC and EIFC. board the shipdeposit into his personal account or provide funds to a third party.
Khan and Garg met in Stuyvesant High School and participated in New York University Together, In 2009, co-founded EIFC, a firm specializing in asset management and advisory services for private student loan portfolios. They each own 50% of the company. EIFC is a 25% shareholder in Embark, a company that develops proprietary software for university applications.
“Lazar and I grew up like brothers in Queens and went to high school and college together. When we started this business, we were best friends. We should have kept better books and records,” Garg said in said in a statement. house line. “I am grateful that the vast majority of claims in this case have been dismissed over the years and am optimistic that the truth in these final claims will prevail on appeal. I am pleased that this case is finally over.
Garg’s lawyer, Jason Berland, said in a statement that Garg is responsible for the losses caused by EIFC, in which Garg and Khan each own 50%. “There is no amount directly owed to Khan. This is a derivative action.
A spokesperson for Better told HousingWire that this was a “personal matter” that preceded its founding and had nothing to do with its operations.
Garg will continue to lead the company. The first three months of 2024, Better Home Financial Holdings Limitedthe parent company of digital lenders better one, improved mortgage production and revenue. However, expenses continued to increase and the company remained in the red.
Most recently, the company changed its leadership structure, hiring mortgage veteran Chad Smith, who previously served as mission loanserving as president and chief operating officer.
James Kleimann contributed reporting
