Uber investor Benchmark sues ex-CEO Travis Kalanick for fraud

By : |August 11, 2017 0

Venture Capital firm and an early investor in Uber, Benchmark Capital is suing Travis Kalanick in an attempt to force him off the board of the ride hailing firm. Benchmark Capital, which is also one of the Uber’s largest shareholders, filed the suit against Kalanick on Thursday in Delaware Chancery Court, accusing the former chief executive of fraud, breach of contract and breach of fiduciary duty.

Kalanick, on his part, issued a statement calling the lawsuit “completely without merit and riddled with lies and false allegations.” The statement accused Benchmark of “acting in its own best interest contrary to the interest of Uber” and denounced the legal action as a “transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder.”

The suit, first reported by Axios revolves around the June 2016 vote to increase the size of the board’s voting directors from 8 to 11 seats, with Kalanick having the sole right to designate those seats. Benchmark says it would never have voted to allow for those extra seats had it known about Kalanick’s “gross mismanagement and other misconduct at Uber.”

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Bill Gurley, who was once a mentor to Kalanick and one of his closest confidants led Benchmark’s investment into Uber. Gurley resigned from Uber’s board in June after he grew increasingly unhappy with Kalanick’s behavior, according to sources close to the situation.

The lawsuit adds to the ever growing list of problems that Uber has been plagued with. Uber was involved in a trade-secret lawsuit by Alphabet’s Waymo unit, sexual harassment allegations that led to the departure of many employees and an alleged misconduct by Kalanick and other executives in handling a rape committed by an Uber driver in India.

Uber and Benchmark Capital have declined to comment on the situation.

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