California-based venture capital firm Benchmark Capital has filed suit against former Uber CEO Travis Kalanick for fraud, breach of contract and breach of fiduciary duty.
The news was first reported by Axios.
Benchmark was one of the earliest investors in the ride-sharing firm and holds a seat on its board of directors. The firm was also instrumental in forcing the controversial Kalanick to resign in June.
Here's a look at the suit.
1. Benchmark Claims Kalanick Manipulated the Firm For His Benefit
Benchmark's main allegation against Kalanick is that he manipulated the firm to "increase his power over Uber for his own selfish ends" when he "induced" Benchmark into allowing him to name three directors to fill three newly created board seats back in June 2016. Prior to those appointments, Uber's board had only eight voting members. After, it had 11, with the three most recent appointees designated by Kalanick.
But, Kalanick needed approval from Benchmark, an investor and occupier of a board seat, for the new appointments. They accepted. But, the firm alleges he 'intentionally failed' to conceal a number of problems surrounding the ride-sharing firm which would have made Benchmark deny his request.
2. What Benchmark Alleges Travis Failed to Conceal
Benchmark notes several instances in which Kalanick "intentionally concealed and failed to disclose his gross mismanagement" along with other misconduct.
The suit claims that Kalanick withheld information related to Uber's current lawsuit with Alphabet's (GOOGL) Waymo.
And Benchmark accused Uber of having a "pervasive" culture of gender discrimination and sexual harassment.
Those, along with a "host of other inappropriate and unethical" orders issued by Kalanick, would have all caused Benchmark to deny his request to appoint the additional board members.
Benchmark is seeking to invalidate the 2016 shareholder meeting which resulted in Kalanick appointing the three members. The firm also aims to make null and void Kalanick's appointment of himself to one of the three seats.
It also is asking the court for a preliminary injunction against Kalanick's continued involvement with Uber board matters which, if granted, would remove him from its current CEO search process.
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