Published: Fri, August 11, 2017
Sci-tech | By Jackie Newman

Investor Benchmark Capital Sues Uber Ex-CEO Travis Kalanick

Investor Benchmark Capital Sues Uber Ex-CEO Travis Kalanick

In a blockbuster lawsuit, Uber Technologies Inc. investor Benchmark Capital today sued embattled former Chief Executive Travis Kalanick for fraud and breach of contract and fiduciary duty.

It goes on to say: "Kalanick's overarching objective is to pack Uber's Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO - all to the detriment of Uber's stockholders, employees, driver-partners, and customers".

Another early Uber employee, Ryan Graves, announced Thursday that he is stepping down from a vice president role but will keep his seat on the board. Benchmark says it never would have voted to allow for those extra seats had it known about Kalanick's "gross mismanagement and other misconduct at Uber".

At the time of Kalanick's resignation, it was reported that Benchmark, along with other key investors Lowercase, First Round, and Menlo Ventures, all stood to lose billions of dollars if Uber were to decline in valuation.

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Specifically, Benchmark Capital's complaint focuses on a 2016 decision to expand Uber's board of voting directors from eight to 11 seats.

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 wants the court to invalidate the expansion vote, which would remove Kalanick from the board, and in the meantime wants him banned from participating in board activities such as the CEO search.

"In 2016, Kalanick fraudulently obtained control of three newly created seats on Uber's Board by his material misstatements and fraudulent concealment from Benchmark of material information that would have led Benchmark to reject the creation of the seats", Benchmark Capital wrote it its complaint. "Travis will continue to act in the interests of Uber and all of its stakehodlers and is confident that these entirely baseless claims will be rejected".

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