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Uber investors seek to oust Benchmark after 'destructive' lawsuit

12 August 2017

A group of Uber investors has now come to the defense of ousted CEO Travis Kalanick after one of its largest investors, Benchmark, sued the former CEO for allegedly rigging the company's board seats to eventually return as its CEO. The suit alleges that Kalanick fraudulently withheld critical information from Uber's board of directors when he asked to increase the size of the board from eight to 11 members.

Uber's board members are presently searching for a new CEO after Kalanick's departure.

The dissenting shareholder group - headed by Los Angeles billionaire Ron Burkle, Hyperloop One backer Shervin Pishevar, and music mogul Adam Leber - blasted the legal salvo from Benchmark's Bill Gurley as a "fratricidal" move against Kalanick that could jeopardize Uber's ability to raise funds and find a new CEO.

Travis Kalanick may have stepped down as Uber's CEO, but he hasn't been sitting around idly since then, according to a new lawsuit.

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This is a new twist to the scandals that have hit the company of late, and it is expected to make the search for a new CEO even more hard.

Benchmark isn't actually suing Uber, the company itself.

The suit, which calls on a DE court to bar Kalanick from tinkering with the Uber board in any way, argued that Kalanick saw his resignation as unavoidable and finagled to "pack the board with loyal allies in an attempt to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO". The lawsuit makes clear that tensions between Kalanick and Benchmark have remained high ever since.

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

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The letter was referring to a May boating accident that killed Kalanick's mother and injured his father even as the hard-charging Uber co-founder was losing his position as CEO of the company.

Axios, which first broke the story, quoted a Kalanick spokesman who called the suit "a transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder". With this statement and now the lawsuit, Ben Narasin a venture capitalist in the Silicon Valley is convinced that Kalanick "is done".

"To date, Kalanick's only response has been an email (sent on or around June 30, 2017) that he is "not ready to sign" the amended Voting Agreement", Benchmark said in the suit. At the time, Kalanick inserted a provision that gave him the "absolute right" to select three directors to fill the seats.

Specifically, we do not feel it was either prudent or necessary from the standpoint of shareholder value, to hold the company hostage to a public relations disaster by demanding Mr. Kalanick's resignation, along with other concessions, on a few hours' notice and within weeks of a personal tragedy, under threat of public scandal.

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Uber investors seek to oust Benchmark after 'destructive' lawsuit