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Travis Kalanick blasted Benchmark for ambushing him with a lawsuit

19 August, 2017, 05:46 | Author: Lloyd Doyle
  • Former Uber CEO Travis Kalanick says he is 'baffled' by the bombshell lawsuit that claims he committed fraud

Uber co-founder, former CEO and current board member Travis Kalanick strongly rebutted Benchmark Capital in legal documents filed yesterday, arguing that the venture capital firm's lawsuit was initiated "as part of its public and personal attack" on him, Tech Crunch reported.

Further, according to the document, Benchmark did not raise any of the claims it put forth in its lawsuit until its filing, challenging the firm's claim that the investors felt "fraudulently induced" to giving Kalanick control of three board seats.

But just nine days after he went on leave, Benchmark partners Peter Fenton and Matt Cohler came to Kalanick's hotel in Chicago to demand that he submit his permanent resignation as CEO, the filing said.

Benchmark said in the suit it would not have approved the board expansion had it been aware of the controversy surrounding Kalanick and Uber's workplace issues, accusing the CEO of packing the board with supporters.

"Resorting to litigation was an extremely hard step for Benchmark", the statement said.

The controversial exec said that the lawsuit was the first time he heard Benchmark say that it would have never agreed to those seats' addition if it knew about his "gross mismanagement and other misconduct at Uber".

The suit centers on Kalanick creating three additional seats on Uber's board of directors in 2016. "But the Holder report can not be ignored".

"If you were dealing with the average CEO of a venture-backed company, they'd normally look at a lawsuit like this and decide to negotiate instead", Schiffer said. At the US$68 billion valuation that Uber achieved a year ago, Benchmark's stake would be worth nearly US$9 billion. "Failing to act now would mean endorsing behavior that is utterly unacceptable". Kalanick owns 10 percent of the company. Others, such as early investor Shervin Pishevar, have been less enthused. Benchmark said that Kalanick had hid numerous indiscretions in order to be granted those three seats. Shervin Pishevar wants to buy out Benchmark, describing the lawsuit as "holding the company hostage" in a leaked letter. That could be hard to prove, according to legal experts, because Kalanick does not control a clear majority of the board, and even if he did, the possible outcomes are speculative. The board met immediately after Benchmark filed the lawsuit, and the six members not involved in the dispute issued a unanimous statement saying they were "disappointed" with the suit, and calling it destructive to the company, according to the filing.

"If the lawsuit fails, I think they're going to be out of bullets", Schiffer said of Benchmark.


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