Early Uber investor sues former CEO Travis Kalanick, who says suit is 'riddled with lies'
Benchmark Capital Partners, an investor in Uber Technologies Inc., has sued Uber's former chief executive Travis Kalanick for breach of duty.
The complaint, which was filed Thursday in the Delaware Chancery Court, centers on the fact that Kalanick was able to name three new voting directors to Uber's board in 2016, expanding the number of voting directors from eight to 11. Kalanick took one of those seats after his resignation, but the other two have yet to be filled.
When approving the expanded number of seats, Benchmark said Kalanick concealed "gross mismanagement," including company harassment issues as well as the acquisition of self-driving truck startup, Otto, which is now at the center of a lawsuit with Alphabet Inc. (NASDAQ:GOOGL). Benchmark said it would not have approved the three seats, had it known about these issues, and that Kalanick used the seats to gain power knowing that he could be removed. Kalanick recently resigned from Uber, but has reportedly been trying to come back to the company.
"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," the complaint says.
Benchmark is asking for an invalidation of that stockholder vote, which would get rid of those three seats and also remove Kalanick from the board. Before that, it is asking the court for preliminary injunction against Kalanick participating, voting or having a say in board matters.
A spokesperson for Travis Kalanick said the claims were baseless and Kalanick will continue to act in the interests of Uber and its stakeholders.
"The lawsuit is completely without merit and riddled with lies and false allegations," the spokesperson said in an emailed statement to MarketWatch. "Benchmark's lawsuit is a transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder and to silence his voice regarding the management of the company he helped create."
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