Travis Kalanick is once again in the spotlight after Benchmark Capital announced it was suing the former Uber CEO for fraud. Benchmark was one of Uber’s earliest investors, and it issued a letter to Uber employees explaining why it was necessary to proceed with the lawsuit.
Benchmark stressed that they should have agreed to sue Kalanick much earlier. The firm claims that when the new CEO search began around 50 days ago, Kalanick agreed to “modify the company’s voting agreement to ensure that the board was composed of independent, diverse, and well qualified directors.” The company claims Kalanick has not taken the agreement seriously and hasn’t made any improvements on his end. Benchmark warned Kalanick that it would proceed with litigation, but he apparently did not heed their warning.
Benchmark was also one of the leading investors that pushed to have Kalanick step down as CEO because of the allegations of sexual harassment, discrimination, and other problems per the company investigation through former U.S. Attorney General Eric Holder. Benchmark released the following statement regarding Kalanick’s departure as CEO:
“We acted out of a deep conviction that it would be better for Uber, its employees, and investors to have a fresh start. We believed then, as we believe now, that failing to act would have meant endorsing behavior that was utterly unacceptable in any company, let alone a company of Uber’s size and importance.”
Travis Kalanick is reportedly “baffled” by Benchmark’s decision to sue him and has begun preparing for the legal battle, per Axios. This week, Kalanick released his first public statement since it was announced he would be sued:
“Like many shareholders, I am disappointed and baffled by Benchmark’s hostile actions, which clearly are not in the best interests of Uber and its employees on whose behalf they claim to be acting. Since 2009, building Uber into a great company has been my passion and obsession. I continue to work tirelessly with the board to identify and hire the best CEO to guide Uber into its next phase of growth and ensure its continued success.”
It is very clear that Benchmark Capital is not a fan of Kalanick, but will they be able to prevail in their legal battle to prove Kalanick has failed to meet their standards?