It's only getting uglier in the boardroom at Uber. A new lawsuit seeks to oust former chief executive Officer Travis Kalanik from the board, saying he duped a major investor into letting him fill three new seats. The suit was filed Thursday in Delaware Chancery Court by Benchmark Capital, which ownstent of Uber. Earlier this year, Benchmark led the revolt that caused Kalanick to lose his job as CEO. With me to talk about this new lawsuit is Bloomberg News
is Delaware Courthouse reporter Jeff Feely. Jeff, thanks for joining me here. UM walk us through. Just give us kind of the brief version of the history. How did these board seats get created in the first place, and what was Benchmark's involvement at the time. Mr Kalinak has been with The longtime CEO and founder of Uber. Approached Benchmark last year saying that he needed to expand the board to help, you know, I think it easier to run
the company attract outside vests. Benchmark agreed to allow him to expand the board from eight to eleven and give him the authority to fill those three new seats. Um come this year, Benchmark has learned about some problems that Mr Kounick ran into at Uber, including a fight with a rider, a trade secrets lawsuit filed by a unit of alphabet and some other problems, and they basically have
sued now saying that they were misled. He misled them about his management skills, and they would have never allowed him the power to expand the board and fill these three seats had they known how badly things were going at the company. The suit is against Klink or Uber are both of them? Uber suit is a nominal defendant, that the suit is really against Klink. He's the actor here. Okay, So, so tell us a little more about about these allergy Stan's um uh pick whichever one uh strikes you as
being the most worthy of discussion. But but but how is it that that Benchmark says that they were deceived so badly that that they ought to be able to win this lawsuit? Well, I think the I think that one of the tougher issues from Mr Kalinak is this trade secrets case. Uh, the secrets that are involved our technology governing self driving cars. The folks at Alphabets say that some of their former employees that went to work for UM. Uber's self driving unit took the ideas and
some of the technology with them. They sued the company. The self driving unit had been one of the you know, the crown jewels of the company UM and that came to light, you know, after Mr Kalnik made the request to span the board. UM that is going to be a major issue in the case aces whether or not you know that was hidden and you know, whether he used that self driving unit as one of the things to show how he was gonna make Cooper you know, the best things to slice bread and uh so it'll
be very interesting. So how how unusual is it for an investor like this, a major investor to file a lawsuit over the composition of a board. It's unusual. We've had suits where major investors would sue companies like Fairness, seeking to recoup investments in companies, saying they were duped into making the investment. Fairness is well known um as having problems over touting its blood testing capabilities. UM It's uh,
it's it's not common. Let's say that some some people have made the comparison you and I were discussing earlier with Viacom in sum to Redstone. Is that an apt comparison. That's really not an apt um um example, because Mr Ridstone was the founder of the company and he was the one who removed uh some board folks in a fight for control. Here we have the board removing the
CEO and founder. This may be more like the situation with the former CEO of American Apparel, Dug Charne, who was shown the door over some personal misconduct issues at his company. So this that may be more analogy has given Mr Kuni's history of um volcanic eruptions. Jeff, you spent a lot of time covering that that courthouse there. How how quickly do lawsuits moved there? Do you have any or of sense about a time frame for well?
Chance of court was set up to provide speedy decisions, and these corporate matters, these particular cases where someone is challenging the appointment or election of a director, are by statute put on a fast track basis. So some commentators have said, this could be we could have a decision in this case within two months. Fantastic. I hope you'll be around for two months, Jeff, because we have you back on to talk about it. Um what hope springs
eternal on that score. Greig all right, um, And and briefly, Travis kalin Nick, Uh, what have you heard from him about the lawsuit? His representatives have said that the lawsuits, the lawsuit is filled with inaccuracies and personal innuendos, and he will he wants to have his day in court. Okay.
That was Bloomberg's Jeff Feely talking about new lawsuit filed against former Uber CEO Travis kal Nick, saying that he duped a major investor into letting him fill three new seats, create three new seats and fill them on the board of Uber. Jeff, Well, look forward to talking to you again about this in the future. Coming up on Bloomberg Law, we're going to talk about the big business of litigation finance with the managing director of the biggest company in the business.