On Thursday, Benchmark sued Kalanick in Delaware Chancery Court, alleging that he withheld material information before asking the board to vote on adding three additional board seats previous year.
The lawsuit, which was filed on Thursday, accuses Kalanick of concealing a range of misdeeds from the board and of scheming to retain power in the firm.
And now, Uber’s board is weighing in, through a statement sent out by Uber co-founder chairman Garrett Camp on behalf of all the directors – or at least, those who are not Kalanick or Benchmark. Uber is looking to quickly fill the vacant CEO position, while trying to boost morale, battle a trade secrets lawsuit from Alphabet Inc. and defend against well-funded rivals. This is expected to change the way investors deal with start-up founders in the future. The statement accused Benchmark of “acting in its own best interests contrary to the interests of Uber” and denounced the legal action as a “transparent attempt to deprive of his rights as a founder and shareholder.” and Benchmark Capital declined to comment.
Bill Gurley, the venture capitalist who led Benchmark’s investment into Uber, was once a mentor to Kalanick and one of his closest confidants. The company has also dismissed several of its top executives due to those scandals. The lawsuit was filed in an effort to kick Kalanick off the board and get rid of a few empty board seats that were added previous year, with Benchmark arguing that it never would have approved the addition of those seats had they been aware of Kalanick’s “gross mismanagement” of the company.
While Benchmark’s voting power nominally gives it the clout to outvote Kalanick, Kalanick now controls three out of 11 board seats, his own and two vacant seats. Kalanick now occupies one of those seats, but Benchmark is seeking to eliminate all three, according to the complaint. However, Benchmark also claims that Kalanick has reneged on his promise to make those new directors independent and diverse. “It remains all about people, and it’s clear to me the stability of our board of directors, the selection of our new CEO, and the empowerment of our management team is what is needed most”. The lawsuit cites an agreement entered with Kalanick indicating that he would give up those rights when he resigned as CEO.
In wake of a lawsuit Benchmark filed against Kalanick, the company’s board has issued a statement urging both parties to resolve their differences so that employees can get back to work and the company can get back to hiring a new CEO. The investor indicated that some of the top CEOs are scared to take up the job.