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VC Firm Benchmark is suing Travis Kalanick for fraud

Discussion in 'News' started by BurgerTiime, Aug 10, 2017.

  1. BurgerTiime

    BurgerTiime Well-Known Member

    Location:
    Minneapolis
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    https://www.axios.com/benchmark-capital-sues-travis-kalanick-for-fraud-2471455477.html?stream=top-stories&utm_source=alert&utm_medium=email&utm_term=alerts_all
    Update:
    Uber shareholder group asks Benchmark to step down from board following Kalanick suit
    https://techcrunch.com/2017/08/11/u...step-down-from-board-following-kalanick-suit/
    Venture Capital firm Benchmark is suing former CEO of Uber Travis Kalanick for fraud in breach of contract and failure of fiduciary duty in disclosing issues within including sexual harassment claims.
    AXIOS - Aug 10 2017

    [​IMG]


    The battle between Benchmark Capital and Travis Kalanick just went nuclear, with the venture capital firm suing the former Uber CEO for fraud, breach of contract and breach of fiduciary duty. The complaint was filed earlier today in Delaware Chancery Court.

    Key graph, per the suit: "Kalanick, the former CEO of Uber, to entrench himself on Uber's Board of Directors and increase his power over Uber for his own selfish ends. Kalanick's overarching objective is to pack Uber's Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO—all to the detriment of Uber's stockholders, employees, driver-partners, and customers."

    Why it matters: If Benchmark's suit is successful, Kalanick would be kicked off Uber's board of directors -- thus eliminating any faint hopes of him returning to the company in a substantial role.

    resign in June, and tensions between the two have contributed, in part, to the slow pace of finding a replacement. Oh, and venture capital firms don't usually sue fellow board members of their single most valuable investment.

    Complaint: The suit revolves around the June 2016 decision to expand the size of Uber's board of voting directors from eight to 11, with Kalanick having the sole right to designate those seats. Kalanick would later name himself to one of those seats following his resignation, since his prior board seat was reserved for the company's CEO. The other two seats remain unfilled. Benchmark argues that it never would have granted Kalanick those three extra seats had it known about his "gross mismanagement and other misconduct at Uber" — which Benchmark claims included "pervasive gender discrimination and sexual harassment," and the existence of confidential findings (a.k.a. The Stroz Report) that recently-acquired self-driving startup Otto had "allegedly harbored trade secrets stolen from a competitor." Benchmark argues that this alleged nondisclosure of material information invalidates Benchmark's vote to enlarge the board.

    Moreover, Benchmark alleges that Kalanick pledged in writing -- as part of his resignation agreement -- that the two empty board seats would be independent and subject to approval by the entire board (something Benchmark says was the reason it didn't sue for fraud at the time). But, according to the complaint, Kalanick has not been willing to codify those changes via an amended voting agreement.

    What Benchmark wants: An invalidation of the June 2016 stockholder vote and related actions, which would effectively eliminate the three board seats. And, in so doing, remove Kalanick from Uber's board of directors. It also is asking the court for a preliminary injunction against Kalanick's ongoing involvement in Uber board matters which, if granted, would remove him from the CEO search process.

    Stakes: Per the complaint, Kalanick currently holds around a 10% equity stake in Uber, which most recently was valued at around $70 billion. Benchmark holds approximately 13 percent.

    Comment from Kalanick spox: "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. 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. Travis will continue to act in the interests of Uber and all of its stakeholders and is confident that these entirely baseless claims will be rejected."

    More: Axios was unable to reach Benchmark (Update: It declined comment). Uber, which is named as a "nominal defendant" (which is just a statutory requirement, it isn't an actual defendant in the case) declined comment. It also is worth noting that, earlier today, Uber's first employee and original CEO, Ryan Graves, said he would step down as VP of operation but maintain his board seat.

    [ Read the entire complaint ]
     
    Last edited: Aug 12, 2017
    Flacco, Kalee and Michael - Cleveland like this.
  2. TwoFiddyMile

    TwoFiddyMile Well-Known Member

    Location:
    charlotte
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    Taxi
  3. Ca$h4

    Ca$h4 Well-Known Member

    Location:
    NYC
  4. rembrandt

    rembrandt Well-Known Member

    Location:
    USA
    The trend is changing. VCs are now starting to come forward from the background to show who the boss is. I believe that the culture of having a bro clown as the public face is coming to an end because these clown are becoming a liability. On the other hand, VCs will not stop with their quasi- Ponzi schemes , they will find something different than maintaining expensive and risky actors like Kalanick or may be the one in the picture below.

    [​IMG]
     
  5. Cigars

    Cigars Well-Known Member

    I am no kalanick fan, but this seems petty.
    Calling gender discrimination "gross mismanagement" (and the innocent venture capital was unaware)
    and trying to invalidate 3 board seats.
    Claiming he agreed to something but now won't sign an ammended agreement over rights to name 2 Board seats.
    Claiming that he knew (but the innocent VC did not know) trade secrets came with Otto.

    The Venture Capital is still in a battle with Kalanick.
    Kalanick is not going quietly and kicking and screaming (and probably trying to exert control over the board).
    Kalanick had the company set up so he would keep control of the board. The VC agreed to that with their investment.

    Now because Kalanick is kicking and screaming (and probably being obstructionist),
    they are attempting to remove him from the board and let the adults take over.

    In my opinion, he still owns 10% and has a right to a board seat.
    Every immoral and unethical (illegal?) thing he did, venture capital knew about and acquiesced to.
    Now they claim they knew nothing about it.
    Graves was part of every unethical thing every step of the way.
    He was allowed to step down and keep his seat.
     

  6. ABC123DEF

    ABC123DEF Well-Known Member

    Location:
    Southeastern USA
    Driving:
    UberX
    I've got my popcorn ready. ;)
     
  7. TimyTim

    TimyTim Member

    Location:
    Chicago
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    Lyft
    The whole company is falling apart pretty quickly and in a spectacular way.
    [​IMG]
     
    Tr4vis Ka1anick, dbla, Kalee and 6 others like this.
  8. rembrandt

    rembrandt Well-Known Member

    Location:
    USA
    Kalanick made the gravest mistake of hurting everybody, leaving no one to stand for him in the end- such an egoist ; the modern day 'Tony Montana'. Had he been at least reasonable with the drivers !
     
  9. jonhjax

    jonhjax Active Member

    Location:
    32233
    none of these owners of uber care about the drivers. haven't you figured that out yet? If uber had rates high enough to make a profit and keep their drivers happy their rates would've been about the same as taxis, so they wouldn't have grown nearly as fast.
    taxis have been creating their own apps too, in case you haven't noticed.
     
  10. WaveRunner1

    WaveRunner1 Well-Known Member

    Location:
    DC Metro
    Lord Travis was making a comeback or so he thought he was after he was dethroned as CEO. Now, cornered, he may resort to desperate tactics. You think Kim Jong-un is unstable and a threat? Wait until you see what Lord Travis has in store.
     
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  11. ABC123DEF

    ABC123DEF Well-Known Member

    Location:
    Southeastern USA
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    This is all probably just what happens when you try to grow at breakneck speeds trying to run over every and anything in the way in the process. There's a lesson to be learned here, kids.
     
    Mazda3, rembrandt and TwoFiddyMile like this.
  12. Ca$h4

    Ca$h4 Well-Known Member

    Location:
    NYC
    TwoFiddyMile likes this.
  13. Lag Monkey

    Lag Monkey Well-Known Member

    Location:
    Raleigh Durham
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    Kalanick still causing a chit storm at UBER and he isn’t even the CEO anymore. Talk about burnt bridges they turned on him as quick as he turned on everyone else. The Lannisters send their regards, Travis
     
  14. Ca$h4

    Ca$h4 Well-Known Member

    Location:
    NYC
  15. WaveRunner1

    WaveRunner1 Well-Known Member

    Location:
    DC Metro
    Apparently Benchmark wants him off the board entirely. Can you imagine co-founding a company and being CEO and quickly finding yourself stripped of any power in the company within just a few months? I almost feel bad for Travis but not really.
     
    ABC123DEF and koyotemohn like this.
  16. Brooklyn

    Brooklyn Well-Known Member

    Well to be fair how would you feel if there's talks of the valuation being dropped by around $20+ billion because of Kalanick's idiocy? I think you'd want him out the door too.
     
    KMANDERSON, ABC123DEF and WaveRunner1 like this.
  17. uberdriverfornow

    uberdriverfornow Well-Known Member

    Location:
    no
    When did this ever happen ? The only thing Travis has wanted to do is make sure drivers don't make any money. Who cares about profit.
     
    ABC123DEF likes this.
  18. TwoFiddyMile

    TwoFiddyMile Well-Known Member

    Location:
    charlotte
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    The LANNISTERS always pay their DEBTS.
     
    Brett090 likes this.
  19. TwoFiddyMile

    TwoFiddyMile Well-Known Member

    Location:
    charlotte
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    Dear Jesus I pray heartily for the quicker death of Uber I'm sorry I've been running with the devil but you were a Jew once too amen
     
  20. ABC123DEF

    ABC123DEF Well-Known Member

    Location:
    Southeastern USA
    Driving:
    UberX
    What's really sad/funny/crazy is...I think a good majority of Uber's own drivers want to see the company's wheels fall off MORE so than taxi drivers do! o_O
     

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