Benchmark Capital, an early Uber investor that holds a seat on the company’s board, filed the lawsuit in Delaware Chancery Court, Axios reported Thursday. Benchmark, which was instrumental in forcing Kalanick to resign as Uber’s CEO in June, believes Kalanick is using the seats and his voting power to plot his return as CEO, something its lawsuit is trying to prevent.
A spokesman for Kalanick has called the lawsuit “completely without merit”. 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.
Around Silicon Valley, the case surprised many technology investors, who deemed it “the nuclear option” for a venture firm.
At the $68-billion valuation achieved by Uber past year, Benchmark’s stake would be worth nearly $9 billion, according to commentators.
Benchmark is seeking to have the 2016 changes to Uber’s voting board members invalidated, arguing that Kalanick did not properly disclose his conflicts and other relevant information.
By packing Uber board with Loyal Allies, accusing Kalanick of being Selfish.
According to an entrepreneur expert from the University of Michigan’s Ross School of Business, Benchmark might have a hard time proving to the courts in DE that their concern is borne out of true concern with regards to the company, rather than the fear that their own power base would be diluted.
Uber’s first CEO also left today. By not disclosing potential missteps and infractions – which encompasses a number of things, including a heated legal battle with Google over ostensibly stolen driverless auto technology – Benchmark argues that it wouldn’t have agreed to the board of director’s collective decision to add three new seats.
Upon leaving the position, Kalanick said he would remain a part of the decision making process, taking up one of the newly created board seats of which he had control.
Benchmark’s claims included “pervasive gender discrimination and sexual harassment”.
The venture-capital firm sued Kalanick on Uber on August 10 in Delaware Chancery Court.
Kalanick stepped down as the CEO of Uber in June.
But, Kalanick needed approval from Benchmark, an investor and occupier of a board seat, for the new appointments. Things only got worse from there for Kalanick and Uber. That would mean that the three additional seats no longer exist, and it would strip Kalanick of his board seat “effective immediately”. 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.
Benchmark invested in Uber six years ago in February 2011, when the ride-hailing service was still building itself up.