A couple of days ago, former Uber CEO Mr. Travis Kalanick was sued by Benchmark Capital Partners for breach of contract, fraud (benchmark alleges that Kalanick fraudulently obtained amendments to a voting agreement that gave him control over three board seats, including one that he sits in) and breach of fiduciary duty, which is a fancy name for the legal obligation of one party to act solely in the interest of another party – which, for this case, is based on Kalanick’s alleged failure to advise Uber’s stakeholders about legal and financial issues in the taxi-hailing organization.
Less than 24 hours later, another set of Uber investors and board members faulted Benchmark’s suit, citing the move could derail Uber’s efforts in finding Kalanick’s replacement as CEO.
Kalanick, together with his legal team, have responded to Benchmark’s suit that can be traced back to when his mother died in a boating accident. Travis says that Benchmark was one of the shareholders that forced him to step down when the accident took place (although the company was on on the spotlight about sexual harassment issues), which he perceived as taking advantage of his personal tragedy. For the fraud case, Kalanick’s statement cites that Benchmark was not ‘fraudulently induced’ to the aforementioned amendments because the stakeholder did not challenge those amendments in 14 months.
“Benchmark does not allege a single false statement by Kalanick. Instead, its theory is that Kalanick failed to disclose material information to Benchmark. But rather than pleading particularized facts to support its claims as required, Benchmark offers only unsupported ‘information and a belief’ allegations, and citations to unverified media reports and allegations in other lawsuits. In reality, after learning of the matters alleged in the complaint, Benchmark repeatedly acknowledged, including as recently as June 27, 2017, that Kalanick has the right to appoint three directors, including himself. Benchmark cannot now avoid that result through threadbare allegations of fraud,” reads a statement from Kalanick’s legal team.
Kalanick has asked Benchmark to drop the suit as stated here.
