Irked stake­hold­ers punch back at Bench­mark

New York Post - - BUSINESS - rmor­gan@ny­post.com By RICHARD MOR­GAN

The chaos in­side Uber’s board­room just shifted into high gear.

A group of Uber share­hold­ers is revolting against Bench­mark Cap­i­tal, the ride-shar­ing app’s big­gest in­vestor, which filed a sur­prise law­suit on Thurs­day that seeks to oust for­mer CEO Travis Kalan­ick from the ride-shar­ing app’s board.

The dis­sent­ing share­holder group — headed by Los An­ge­les bil­lion­aire Ron Burkle, Hyper­loop One backer Shervin Pi­she­var and mu­sic mogul Adam Le­ber — blasted the le­gal salvo from Bench­mark’s Bill Gur­ley as a “frat­ri­ci­dal” move against Kalan­ick that could jeop­ar­dize Uber’s abil­ity to raise funds and find a new CEO.

Their Fri­day let­ter ac­cused Gur­ley — who for years was a men­tor to Kalan­ick be­fore a slew of scan­dals at Uber soured their re­la­tion­ship — of hold­ing Uber “hostage to a pub­lic re­la­tions dis­as­ter by de­mand­ing Mr. Kalan­ick’s res­ig­na­tion.”

In the past year alone, Kalan­ick has been ac­cused of fos­ter­ing a toxic work en­vi­ron­ment rid­den with sex-ha­rass­ment al­le­ga­tions, bleed­ing top tal­ent and steal­ing trade se­crets by hir­ing a Google ex­ec­u­tive to lead its driver­less-car ini­tia­tive.

Bench­mark, one of Sil­i­con Val­ley’s top ven­ture-cap­i­tal firms, in­sists in its suit that Kalan­ick’s re­ported trans­gres­sions weren’t ev­i­dent when Uber’s board voted last year to in­crease its mem­ber­ship from eight to 11 and to give Kalan­ick sole ap- point­ment rights.

Bench­mark also al­leges that Kalan­ick sensed his be­hav­ior would force his ouster. And so he con­trived the ex­pan­sion, “en­sur­ing that he would con­tinue to have an out­sized role in Uber’s strate­gic di­rec­tion even if forced to re­sign,” ac­cord­ing to the suit.

Nev­er­the­less, it is Gur­ley’s res­ig­na­tion from the board that the trio of dis­sent­ing share­hold­ers de­manded Fri­day, like­wise ask­ing that Bench­mark sell off at least three-quar­ters of its 13 per- cent stake in the com­pany, es­ti­mated to be worth more than $8 bil­lion.

The let­ter’s lead au­thor Pi­she­var, a close friend of Kalan­ick, griped that Gur­ley filed the Thurs­day law­suit “on a few hours’ no­tice and within weeks of a per­sonal tragedy, un­der threat of pub­lic scan­dal.”

The let­ter was re­fer­ring to a May boat­ing ac­ci­dent that killed Kalan­ick’s mother and in­jured his fa­ther even as the hard-charg­ing Uber co­founder was los­ing his po­si­tion as CEO of the com­pany.

“We would re­quest that Bench­mark help the com­pany re­al­ize its full po­ten­tial by al­low­ing the nec­es­sary work to be done in the board room rather than the court­room,” the dis­grun­tled in­vestors wrote.

Bench­mark’s suit, filed in Delaware Chancery Court, seeks to have Kalan­ick re­moved as a di­rec­tor by re­vers­ing the board-ex­pan­sion de­ci­sion.

Ax­ios, which first broke the story, quoted a Kalan­ick spokesman, who called the suit “a trans­par­ent at­tempt to de­prive Travis Kalan­ick of his rights as a founder and share­holder.”

The out­come of an emer­gency board meet­ing on Fri­day to ad­dress Uber’s war­ring fac­tions could not be de­ter­mined at press time.

The nasty col­li­sion be­tween for­mer Uber CEO Travis Kalan­ick and Bench­mark Cap­i­tal’s Bill Gur­ley (left) is draw­ing some rub­ber­neck­ers. Three of the ride-hail­ing ser­vice’s in­vestors — in­clud­ing Ron Burkle (inset) — are ask­ing Bench­mark to cool it. Bench­mark’s Gur­ley is su­ing to get Kalan­ick ejected from Uber’s board.

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