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Uber investor lawsuit accuses Kalanick of rigging board

11 August 2017
Uber investor lawsuit accuses Kalanick of rigging board

A major Uber investor has filed suit against former CEO Travis Kalanick, a move that could keep him far away from the company he co-founded.

Benchmark, which was an early investor in Uber and has a seat on its board of directors, alleges that Kalanick's "overarching objective" is to pack the board with "loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO - all to the detriment of Uber's stockholders, employees, driver-partners, and customers".

However the lawsuit plays out, and it could take a very long time to play out, the move would seem to make it almost impossible for Kalanick to return - leaving Uber's fate squarely in the hands of the board.

The suit, scooped by Axios, alleges breach of contract and fiduciary duty by Kalanick.

Benchmark accuses Kalanick of withholding material information about all of these episodes past year during a vote on the board of directors. Neither Benchmark nor Kalanick could be reached for comment.

Benchmark in the suit says it wouldn't have.

Kalanick resigned in June, yielding to pressure from investors seeking to clean up a toxic corporate culture at Uber. He still remains on the company's board, but has interfered with the new CEO search, according to Benchmark's lawsuit.

Kalanick, who had a seat already as CEO, stepped into one of those vacant seats following his resignation.

- Kalanick owns 10 percent of Uber's stock, controls 16 percent of the voting power and has 35 percent of the class B stock.

The lawsuit is completely without merit and riddled with lies and false allegations.

The pioneering company has been facing pressure to rein in a no-holds-barred management style led by Kalanick, 40, and to reform its work environment. Travis will continue to act in the interests of Uber and all of its stakeholders and is confident that these entirely baseless claims will be rejected.