Ousted Uber CEO Sued For Fraud By Fellow Board Member
Benchmark Capital, one of Uber’s earliest investors, is suing the ride-sharing company’s former CEO for fraud, among other alleged violations, according to an Axios report published Thursday.
The venture capital firm accuses CEO Travis Kalanick of unlawfully concealing key details in his “gross mismanagement and other misconduct at Uber.” By not disclosing potential missteps and infractions — which encompasses a number of things, including a heated legal battle with Google over ostensibly stolen driverless car technology — Benchmark argues that it wouldn’t have agreed to the board of director’s collective decision to add three new seats.
Kalanick reportedly added the three slots to the board of directors in June 2016, making a total of 11. After being dismissed as CEO by at least the majority of the board in June 2017, Kalanick retained a different seat due to his major stake in the company, while the other two spots remain unfilled.
Kalanick may be planning to vie for appointing board members who are like-minded allies or sympathetic to him, in a maneuver to get his old job back. Benchmark asserts that it wouldn’t have agreed to that decision at the time, if it had been briefed on all of the legal problems and scandals entangling the company while he was the leader.
Along with fraud, Benchmark is also suing for breach of contract and breach of fiduciary duty. It alleges that Kalanick promised in writing to ensure the two other board vacant seats would be unbiased, and contingent on the rest of the board’s approval. How legally binding this pledge is, however, is not yet clear.
The lawsuit is especially telling of the relationship between the two involved parties, as Benchmark was one of the main entities to push for the forced resignation of Kalanick.
Inklings of his return permeated the company to such a great affect that the other co-founder, Garrett Camp, felt compelled to assure employees that Kalanick is not returning to the helm of the company. (RELATED: Uber Is Leakier Than The Trump Administration)
If the lawsuit is successful, than Kalanick would be booted from Uber’s board of directors, ending his dreams of a triumphant return in the process.
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