An explosive lawsuit against former Uber CEO Travis Kalanick, filed by early investor Benchmark Capital, alleges “gross mismanagement and other misconduct” that threaten the value of its investment in Uber. The suit says Kalanick committed fraud to retain control of Uber’s board and seeks to have him kicked off the board and pay unspecified damages.
The lawsuit, filed Thursday in Delaware Chancery Court, alleges that Kalanick — who co-founded ride-hailing company Uber in San Francisco, built it into the world’s most valuable private technology company, and still owns about 10 percent of its stock and 16 percent of its voting power — committed fraud, breach of fiduciary duty and breach of contractual obligations.
“If the allegations in the complaint are supported by the evidence, then Travis Kalanick has a very, very serious problem,” said Joe Grundfest, a professor at Stanford Law School and former commissioner at the Securities and Exchange Commission. Potentially the proof could be quite easy, he said. “Much of the information in the complaint is already in the public record” now but wasn’t known earlier, Grundfest said. “All (Benchmark) would have to do is demonstrate that Kalanick knew about these problems at the times he requested various consents from the directors and didn’t disclose them.”
In other words, it comes down to who knew what when, he said.Read More