Forfeit board seat: Three Uber investors ask Benchmark
Three Uber Technologies investors said a lawsuit against co-founder Travis Kalanick was designed to “hold the company hostage” and asked Benchmark, the venture capital firm that brought the suit, to step down from the board.
The investors sent a letter Friday addressed to Benchmark, saying they opposed the suit, according to a copy reviewed by Bloomberg. The investors are Sherpa Capital’s Shervin Pishevar, Yucaipa Companies’ Ron Burkle and Maverick’s Adam Leber. They don’t hold seats on the board or a majority of the company’s stock, but the letter said they’re seeking other shareholders to add their signatures.
Battles among Uber stakeholders have spilled into public view, and the conflicts risk paralysing the ride-hailing company at a crucial time. Uber is looking to quickly fill the vacant CEO position, while trying to boost morale, battle a trade secrets lawsuit from Alphabet and defend against well-funded rivals. At least two people in consideration for the CEO job, including General Electric Chairman Jeffrey Immelt, called Uber directors expressing dismay after this week’s suit, people familiar with the discussions said.
On Thursday, Benchmark sued Kalanick in Delaware Chancery Court, alleging that he withheld material information before asking the board to vote on adding three additional board seats last year. Kalanick now occupies one of those seats, but Benchmark is seeking to eliminate all three, according to the complaint. A spokesman for Kalanick has said the suit is “completely without merit and riddled with lies and false allegations.”
The firms didn’t respond to requests for comment. The board convened Friday to discuss the lawsuit, said people familiar with the matter.
Members of Uber’s board, not including Kalanick or Benchmark’s Matt Cohler, said they were “disappointed that a disagreement between shareholders has resulted in litigation,” according to an emailed statement. “Our priority remains to select Uber’s new CEO as quickly as possible.”
In the investor letter, the three backers asked Benchmark to sell at least 75 per cent of its stake and forfeit the board seat. “Naturally, we share your concerns about the problems that the Company has confronted in recent months, but we are greatly concerned about the tactics employed by Benchmark to address them, which strike us as ethically dubious and, critically, value-destructive.”
Benchmark deployed a similar move in June to unseat Kalanick as CEO. Bill Gurley, a partner at the firm, brought in four other major investors, who altogether hold as much as 40 per cent of shareholder votes, to endorse a letter asking for Kalanick to step down. Kalanick complied, though he kept a seat on the board. After his ouster, he was looking to stay involved with the company and eventually seek a new role inside.