Uber Backer Benchmark Sues to Kick Kalanick Off Board

Ex-Uber CEO Travis Kalanick duped investor Benchmark into allowing him to fill three of the ride-hailing company’s board seats, according to Bloomberg, citing a lawsuit calling for his ouster as a company director.

The lawsuit is the culmination of a bitter fight between Benchmark and Kalanick. Bill Gurley, a partner at the venture capital firm, led an effort to oust Kalanick as CEO in June. Benchmark, an early Uber backer with a 13 percent stake in the company, says Kalanick sought to pack the board with allies willing to keep him as a director after he resigned.

“Kalanick acquired a disproportionate level of influence over the Board, ensuring that he would continue to have an outsized role in Uber’s strategic direction even if forced to resign as CEO,“ lawyers for Benchmark said in the complaint. Jimmy Asci, a spokesman for Kalanick, said the lawsuit is “completely without merit and riddled with lies and false allegations.“

“This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders,“ Asci said in an email. “Benchmark’s lawsuit is a transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder and to silence his voice regarding the management of the company he helped create.“

Benchmark contends that Kalanick “fraudulently gained control“ of three board seats by hiding his “gross mismanagement“ of the company. In May, Kalanick approached certain investors, including Benchmark’s Gurley, seeking approval to add three new seats to the eight-member board. He repeatedly touted his abilities to manage the company and failed to disclose issues that would have caused Benchmark to question the appropriateness of the additional board seats, according to the complaint.

Three Uber investors said a lawsuit against Kalanick was designed to “hold the company hostage“ and asked Benchmark, the venture capital firm that brought the suit, to step down from the board. The investors sent a letter to Benchmark, saying they opposed the suit. The investors are Sherpa Capital’s Shervin Pishevar, Yucaipa Companies’ Ron Burkle and Maverick’s Adam Leber. They don’t hold seats on the board or a majority of the company’s stock, but the letter said they’re seeking other shareholders to add their signatures.