Scorching on the heels of studies that Uber-founder Travis Kalanick has been attempting to sabotage the seek for his alternative as CEO of the corporate, board member Benchmark Capital is suing him and Uber for fraud, breach of contract, and breach of fiduciary responsibility. Based on the go well with, the funding agency desires Kalanick faraway from his place on the board altogether, successfully ending his tenure on the firm.
Former Uber CEO Travis Kalanick is down, however he in some way doesn’t but think about himself out,…
It’s arduous to overstate how uncommon it’s for a enterprise capital agency to file a lawsuit in opposition to the corporate that’s its greatest funding. This added drama can solely futher harm Uber’s status and worth. However based on Recode, Benchmark claims that its hand was compelled as a result of Kalanick has did not signal paperwork that will flip over management of two seats on the board. He at the moment controls three out of 11 seats on the board, one among which he occupies.
First reported by Axios, the lawsuit was filed in a Delaware courtroom immediately and solely names Uber due to statutory necessities. It issues an settlement between Kalanick and traders in June of 2016. The choice expanded Uber’s board from eight to 11 seats and gave Kalanick management of three seats. Now, Benchmark claims that his failure to reveal the “gross mismanagement and different misconduct at Uber” invalidates the settlement. From the lawsuit:
Kalanick, the previous CEO of Uber, to entrench himself on Uber’s Board of Administrators and enhance his energy over Uber for his personal egocentric ends. Kalanick’s overarching goal is to pack Uber’s Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the trail for his eventual return as CEO—all to the detriment of Uber’s stockholders, staff, driver-partners, and prospects…
The pervasive cultural points explored in Covington’s investigation had been identified to and facilitated by Kalanick on the time of the amendments to the Certificates of Incorporation and the Prior Voting Settlement, however Kalanick didn’t disclose these issues to Uber’s Board or Benchmark on the time.
Benchmark says that when Kalanick was pushed out as CEO, he agreed in writing that he would flip over the board positions to unbiased events. The New York Occasions’ Mike Isaac claims it is a copy of that settlement:
The total lawsuit is properly value studying simply to see how soiled Benchmark is prepared to get with a view to rid itself of Kalanick. It straight up accuses the Uber founding father of overseeing a tradition that tolerated sexual harassment and discrimination. And it says that Benchmark wouldn’t have agreed to the board enlargement if it had identified concerning the alleged theft of mental property from Waymo that has embroiled Uber in a separate lawsuit.
Benchmark owns 13 p.c of Uber, which is valued at $70 billion. That’s some huge cash to place in danger over a private grudge in opposition to one man. However Kalanick has reportedly been telling pals that he’s “Steve Jobs-ing it” and needs to finagle his means again into the CEO place. On the finish of July, the New York Occasions reported that Kalanick resisted hiring Hewlett Packard Enterprise CEO Meg Whitman to take over his previous function—and he’s apparently been stalling each step of the way in which. All of this private and non-private drama will solely make it tougher to discover a appropriate candidate for the job.
A press release from a spokesperson for Kalanick was provided to Recode and the Occasions:
The lawsuit is totally with out benefit and riddled with lies and false allegations. That is continued proof of Benchmark appearing in its personal greatest pursuits opposite to the pursuits of Uber, its staff and its different shareholders. Benchmark’s lawsuit is a clear try to deprive Travis Kalanick of his rights as a founder and shareholder and to silence his voice relating to the administration of the corporate he helped create. Travis will proceed to behave within the pursuits of Uber and all of its stakeholders and is assured that these totally baseless claims might be rejected.
Benchmark hopes to invalidate the 2016 settlement, get rid of the additional seats on the board, and fully take away Kalanick from any determination making on the firm. Apparently, even going by way of the (sure to be messy) discovery course of in courtroom is value it. For Kalanick, his child might be taken away if he loses, however he’ll nonetheless personal 10 p.c of the corporate.
[Axios, New York Times, Recode]