Early investor sues Uber co-founder Travis Kalanick for fraud

Friday, 11 Aug, 2017

Kalanick's co-founder's Garrett Camp told employees this week that his former business partner would be not be returning as CEO, according to Recode, which reported that he was eyeing a Steve Jobs-style return to the company he left.

A venture capital firm is suing former Uber CEO Travis Kalanick for fraud and breach of contract, alleging that he tried to amass power on the company's board and hide from investors his "gross mismanagement and other misconduct".

Benchmark which holds one of the seats on the Uber board, said that it never would have given Kalanick the three extra seats if it had known about his "gross mismanagement and other misconduct at Uber", the lawsuit said.

Investor Benchmark Capital is chafing at the idea, however, and filed suit against its former colleague in DE on Thursday for fraud and breach of contract. Benchmark now apparently sees that Kalanick could have a path back into power at the company using those two vacant seats - he must have three other guaranteed votes on the existing board - so Benchmarks wants the court to invalidate the vote to add those seats altogether. The three new seats, under the new 2016 rules, were to be chosen directly by Kalanick.

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Mr Kalanick was forced out as chief executive after a wave of scandals hit the company, including investigations into sexual harassment, gender discrimination and what was described as a "toxic" work-place culture.

However the lawsuit plays out, and it could take a very long time to play out, the move would seem to make it almost impossible for Kalanick to return - leaving Uber's fate squarely in the hands of the board. Graves steps down from the executive team as the company is still searching for a chief executive, after former CEO Travis Kalanick stepped down.

- Kalanick owns 10 percent of Uber's stock, controls 16 percent of the voting power and has 35 percent of the class B stock. This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders.