VC Firm Benchmark Capital Sues to Oust Kalanick From Uber's Board


The Uber saga continues, and the board of directors has weighed in on the brewing battle between early investor Benchmark and former CEO Travis Kalanick.

The mismanagement Benchmark cites in the case includes sexual discrimination claims brought against Uber earlier this year, as well as the acquisition of autonomous trucking company Otto, which has led to a trade secret case filed against it by Google-owned self-driving auto unit Waymo. Though one of the most significant private companies in Silicon Valley, Uber has been facing allegations of sexism, misbehavior at the executive level, and others. But in a statement, Kalanick's spokesperson said the lawsuit is an attempt to deprive Kalanick of his rights as an Uber founder and shareholder. It is rare for a venture firm to sue the central figure of a valuable portfolio company, and equally unexpected for investors to make a counter-move to push out a fellow investor backing the same company.

The letter's lead author Pishevar, a close friend of Kalanick, griped that Gurley filed the Thursday lawsuit "on a few hours' notice and within weeks of a personal tragedy, under threat of public scandal".

Yesterday Benchmark sued Kalanick for fraud, breach of contract and breach of fiduciary duty in Delaware Chancery Court. These scandals have led to halting of the Uber's self-driving auto after the engineer at the center of its development left the company.

Benchmark accuses former Uber CEO Travis Kalanick of withholding details on mismanagement of the company's self-driving vehicle venture and "pervasive" gender discrimination within the company.

The current lawsuit was filed in a DE court on Thursday 10 August 2017.

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It wants to remove him from board - and get rid of the three extra seats added by Mr Kalanick. After being forced to resign, Kalanick appointed himself to the board and he has a right to select two other members to the board.

Early this week, Uber Chairman and co-founder Garret Camp confirmed to the employees that Kalanick was not coming back as CEO.

The letter was first published on Twitter by Axios and by Mike Isaac of The New York Times.

Uber's board members are presently searching for a new CEO after Kalanick's departure. The lawsuit cites an agreement entered with Kalanick indicating that he would give up those rights when he resigned as CEO.

In the latest development, Sherpa Capital's Shervin Pishevar, Yucaipa Companies' Ron Burkle and Maverick's Adam Leber have started a revolt against Benchmark. The investor indicated that some of the top CEOs are scared to take up the job.