Benchmark Capital Sues Former Uber CEO Travis Kalanick For 'Selfish' Fraud
Aug 11 2017
Venture capital firm Benchmark Capital is suing former Uber Chief Executive Officer Travis Kalanick to force him off the board of the ride services company and rescind his ability to fill three board seats, according to the lawsuit.
Kalanick's co-founder's Garrett Camp told employees this week that his former business partner would be not be returning as CEO, according to Recode, which reported that he was eyeing a Steve Jobs-style return to the company he left. In addition, Benchmark alleges that Kalanick has refused to follow through on a previous agreement to make the two board seats open to approval by the entire board of directors.
But, Benchmark contends that it would never have given Kalanick those seats had it better understood his "gross mismanagement and other misconduct at Uber", which Benchmark claims included "pervasive gender discrimination and sexual harassment".
The suit revolves around a June 2016 decision by Kalanick to increase the size of the board by 3 seats, from 8 to 11.
Investor Benchmark Capital is chafing at the idea, however, and filed suit against its former colleague in DE on Thursday for fraud and breach of contract.
Benchmark accuses Kalanick of withholding material information about all of these episodes a year ago during a vote on the board of directors.
The lawsuit filed Thursday accuses Kalanick of concealing a range of misdeeds from the board and scheming to retain power at the company even after he was forced to resign as chief executive of Uber in June following a series of scandals.
Benchmark's lawsuit exemplifies the level of chaos within Uber's ranks as the $69 billion company has continued its search for a new CEO.
For now, Kalanick holds 10% of stock and 16% of voting rights in Uber, while Benchmark has 13% of stock and 20% of voting rights.
What Benchmark wants, the filing suggests, is to boot Kalanick from the board and Uber management for good, while kicking the number of board members back down to 8 total.
Uber wrote in a statement that the lawsuit is "without merit and riddled with lies".