Uber Backer Benchmark Sues to Kick Kalanick Off Board

Ryan Graves is stepping down as SVP but will stay on the board.                  LinkedIn

Ryan Graves is stepping down as SVP but will stay on the board. LinkedIn

One of Uber Technologies Inc.'s largest shareholders on Thursday sued the ride-hailing firm's former chief Travis Kalanick in a fight over board seats.

Kalanick was trying to "pack Uber's board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO", Benchmark said in the lawsuit. It wants to eliminate the additional board seats. At the time, Benchmark alleges that Kalanick failed to disclose pending controversies like its trade secrets lawsuit with competitor Waymo and allegations of sexual harassment and a toxic work culture to the firm. The company is looking for a new chief executive after Kalanick was pressured to step down, and Graves said that he preferred to make his own move before the new leader was chosen.

In its lawsuit, Benchmark argued that Kalanick was aware of these problems when Uber's board in 2016 agreed to expand the number of voting directors from eight to 11, with Kalanick having the sole right to designate those seats.

Kalanick's pugnacious style largely defined Uber's approach and helped it become a transportation colossus valued at $68 billion, the largest private firm backed by venture capitalists in the world.

Investor Benchmark Capital is chafing at the idea, however, and filed suit against its former colleague in DE on Thursday for fraud and breach of contract.

Kalanick, who had a seat already as CEO, stepped into one of those vacant seats following his resignation. He still remains on the company's board, but has interfered with the new CEO search, according to Benchmark's lawsuit. The complaint says Kalanick still holds about a 10-percent stake in the company.

Investors from Benchmark led the charge in pressuring Kalanick to resign. "Travis will continue to act in the interests of Uber and all of its stakehodlers and is confident that these entirely baseless claims will be rejected".

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