Ever since Uber co-founder Travis Kalanick resigned as the corporate’s chief government in June, there have been rumors that he was plotting his return. On Thursday, Benchmark Capital Companions, one of many earliest buyers within the experience-hailing firm, filed a lawsuit towards Kalanick with the hope of squashing any such plans.
Within the go well with filed in Delaware Chancery Courtroom, the Menlo Park, Calif., enterprise capital agency alleges that Kalanick breached his fiduciary obligation and contractual obligations by stacking the corporate’s board with allies to defend his conduct from redress.
The go well with contends this was achieved to “clear the trail for his eventual return as CEO — all to the detriment of Uber’s stockholders, staff, driver-companions, and clients.”
The go well with names each Kalanick and Uber, nevertheless it seeks damages solely from Kalanick himself.
Benchmark alleges that in mid-2016, Kalanick dedicated an act of fraud when he satisfied the board to approve of three new board seats for which he would have appointment energy, with out first informing them of a collection of occasions he was allegedly concerned in or aware about that might later result in his pressured resignation.
Kalanick stepped down as Uber’s CEO in June after these controversies got here to mild. They included a lawsuit by Google’s self-driving-automotive subsidiary, Waymo, alleging theft of commerce secrets and techniques; one other lawsuit by a lady in India who alleged Uber obtained her medical data after she was raped by one of many firm’s drivers; and widespread allegations of sexual harassment on the agency.
Benchmark, which led the cost in pressuring Kalanick to resign, cited all three instances in its go well with as examples of Kalanick’s mismanagement.
“Kalanick knew Benchmark by no means would have accredited … the three new Board seats if Benchmark had recognized the reality about Kalanick’s prior conduct,” the go well with reads. “Kalanick additionally understood that these issues, as soon as revealed, would doubtless pressure him to resign as Uber’s CEO, and thus sought to grant himself a strategy to play an ongoing management position at Uber as soon as the reality got here out.”
Uber declined to remark. In a collection of tweets Monday, Benchmark stated that it was nonetheless bullish on Uber as an organization.
Waymo noticed a chance to additional its personal case, with a spokesperson for the agency issuing a press release saying “there’s vital and direct proof that Uber is utilizing stolen Waymo commerce secrets and techniques. There’s additionally vital proof that Uber management knew about Levandowski’s misconduct and, fairly than do the best factor, tried to hide it.”
Kalanick furthered Benchmark’s suspicions that he was angling for a return to energy when, after resigning as CEO and departing the board seat reserved for the CEO, as required, he instantly re-appointed himself to one of many three vacant board seats. The lawsuit alleges that he then refused to signal an settlement that might guarantee the 2 vacant board seats can be crammed by candidates who’re “unbiased, skilled, unbiased, and numerous, and topic to the approval of all then-present administrators aside from one.”
Sources near Kalanick stated he had regretted his determination to resign, and that he was enthusiastic about returning to a management position on the firm, however it’s unclear if he had a plan to take action.
A spokesperson for Kalanick dismissed the claims in a ready assertion, saying that the lawsuit was with out benefit and “riddled with lies.”
“That is continued proof of Benchmark appearing in its personal greatest pursuits opposite to the pursuits of Uber, its staff and its different shareholders,” the spokesperson stated. “Benchmark’s lawsuit is a clear try and 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 solely baseless claims might be rejected.”
The lawsuit is, in essence, a battle for management over Uber’s board, and such battles usually are not uncommon, in line with authorized specialists.
“However to make these accusations towards the founding father of an organization whose blood and sweat turned Uber into what it’s in the present day, sure, that may be a bit peculiar,” stated Dan Handman, an lawyer with Hirschfeld Kramer.
Lawsuits of this nature can take years to litigate, Handman stated, and to safe even a preliminary injunction, the onus is on the plaintiff to show that they’re more likely to succeed at trial, and that they might endure some type of irreparable hurt until a preliminary injunction is granted.
“It’s truthful for them to say [Kalanick] is making an attempt to exert his affect on the corporate, that he hasn’t severed ties as utterly as he would have the corporate consider, however what occurs because of that’s solely speculative,” Handman stated.
In fraudulent concealment instances, plaintiffs would additionally need to show that they didn’t truly know what was happening.
“The quantity that Benchmark knew, what they knew, how they knew it, and what their response was, is all important,” Handman stated. “If it seems that Benchmark was nicely conscious of the very issues they’re complaining about, their lawsuit gained’t get very far.”
If Benchmark will get what it needs, the three board seats Kalanick allegedly controls can be eradicated, and Kalanick can be blocked from collaborating in any conferences, votes, or different actions with Uber’s board. Kalanick — and never Uber — would additionally should pay unspecified damages and authorized charges to Benchmark.
And though the lawsuit provides one other bump within the street for Uber, Benchmark should assume it’s vital to guard its funding in what’s thought-about the world’s most beneficial begin-up. The lawsuit alleges that Kalanick’s “improper position on the board” has already had a unfavorable impact on the corporate’s seek for a brand new CEO, and that potential candidates have withdrawn from the method due to his participation.
“Kalanick’s improper actions, if allowed to proceed, would trigger irreparable hurt to Uber by exposing it to reputational, regulatory and different dangers,” the agency stated.
four:25 p.m.: This text was up to date to incorporate extra particulars from the lawsuit and remark from Travis Kalanick’s spokesperson and from lawyer Dan Handman.
This text was initially revealed at 1:30 p.m.