Uber faces shareholder anger after suit against ousted CEO

Ride- services company Uber is facing a divided board of directors and angry shareholders after investor Benchmark Capital filed a lawsuit against the company’s ousted chief executive, Travis Kalanick.

Over the weekend, three Uber investors asked Benchmark to divest its shares and step down from Uber Technologies Inc’s board, according to an e- mail published by news website Axios and confirmed by Reuters.

Also on Friday, members of the board of directors sent an email to Uber staff expressing dismay over the Benchmark lawsuit, according to a copy of the note obtained by Reuters.

“The Board of Directors is disappointed that a disagreement between shareholders has resulted in litigation,” the directors wrote. “The Board has urged both parties to resolve the matter cooperatively and quickly, and the Board is taking steps to facilitate that process.”

Benchmark, in its lawsuit filed on Thursday, is seeking to force Kalanick off the board. It accuses him of concealing misdeeds and scheming to retain power at the company even after he was forced to resign as chief executive in June.

Benchmark was among the Uber investors in June that pressed Kalanick to step down after a string of setbacks.

Investors Shervin Pishevar of Sherpa Capital, Ron Burkle of Yucaipa Companies and Adam Leber, an angel investor who works for music company Maverick, on Friday wrote an e- mail to shareholders and board members calling for Benchmark to remove itself from the company board and divest enough of its shares so that it would no longer have the right to appoint other board seats.

“We have investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75 percent of their holdings,” the e- mail said, according to Axios.

Reuters confirmed thee-mail with a source close to one of the investors. The three investors and Benchmark could not be reached for comment.

The division and hostility emerging among Uber investors and directors opens a new front in a highly unusual public battle for Silicon Valley.

It is rare for a venture firm to sue the central figure of a valuable portfolio company, and equally unexpected for investors to make a counter- move to push out a fellow investor backing the same company. Pishevar, Burkle and Leber – who are not members of the board of directors – said Benchmark’s lawsuit harms Uber’s valuation, interfere s with fundraising efforts and impedes the company’s search for a new CEO to replace Kalanick.